Initial coin offerings (ICOs) may have found some footing in the United States after the Chamber of Commerce established its new Fintech Innovation Initiative, which is calling for more precise regulations on cryptocurrencies and crypto-related activities.
The Chamber of Commerce is the US’s largest business lobbying group with incredible influence and with this new initiative, it is taking aim at “bridging the gap between tech and DC”.
New approach necessary
Last week on 18 July, the group held a joint event between the Chambers Center for Capital Markets Competitiveness (CCMC) and the Chamber Technology Engagement Center (C_TEC) to discuss regulatory frameworks tied to nascent fintech industries.
In a report sent to US financial regulators, the Chamber of Commerce highlighted that the US could fall behind other countries that are already supporting innovation, making note of the USD 6 billion invested in blockchain in 2017, and the USD 10 billion that has already been invested in 2018.
To prevent the stifling of innovation, which the chamber believes would move investment, enterprise and entrepreneurs abroad to jurisdictions with greater regulatory certainty, it has made several recommendations with cryptocurrencies and ICOs given some focus.
So far, ICO regulations in the United States have been precarious at best with the Securities and Exchange Commission (SEC) regulating tokens issued through the capital fundraising method as securities, a decision of which that has been challenged by the infamous John McAfee.
The commission has specifically urged the SEC to provide further guidance on how to classify tokens and ICOs in order to provide companies with “more predictability and certainty in the marketplace”.
Clarification needed
It wishes for both the SEC and the Commodity Futures Trading Commission (CFTC) to study how ICOs can continue to be an effective fundraising method and, specifically, for the CFTC to study cryptocurrencies can function in the futures and commodities market.
To quote the report, “In both cases, we urge the agencies to regulate the products and services enabled by the technology instead of the technology itself.”
The report later adds, “As the crypto industry rapidly evolves, it is critical that both the SEC and CFTC are mindful of the fast-moving pace of technology, create streamlined processes to assess the tokens, and be prepared to issue relief so regulatory hurdles do not become a barrier to entry.”
Transformative innovations
Previously, the commissioner of the CFTC had stated that “cryptocurrencies will proliferate to every economy and every part of the planet”, revealing an extraordinarily bullish stance on the industry, a stark contrast to SEC chairman Jay Clayton who has notoriously approached ICOs and cryptocurrencies with prudent caution.
In the conclusion of the report, the Chamber offers a rationale saying that “the speed of innovation is not slowing anytime soon”. It continues to predict that it will accelerate as years go on and that the technological innovations are going to transform the economy and the daily lives of everyone, urging the US to lead this transformation.
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