Why Is the US Struggling to Keep Up with Other Nations from a Regulatory Perspective?

July 20, 2019

Bill Taylor, Chief Investment Officer, Fintek Capital LLC, discusses one of the key obstacles facing US regulators: its difficulty in defining this nascent asset class and distinguishing cryptocurrencies from digital assets.


Dara Albright: Do you sense, Bill, that U.S. regulations are at least starting to catch up right now, or are we that far behind?

Bill Taylor: I think they are beginning to start catching up. There is awareness that there is a brand new asset class out there. They're having trouble, in my opinion, defining what that is. They put everything in one big box (cryptocurrencies) without realizing they can be a worthless token. Nobody has. It could be Bitcoin, Bitcoin cash, that has genuine use, or there's a digital asset that's totally different than cryptocurrency. A digital asset is a token, the smart contract based upon the blockchain that is backed by a physical asset, whether it be real estate, a collectible, gold or metals, whatever it is, that's a digital asset.

Our jurisdictions here at the SEC and CFTC, particularly, are looking at this as one big class, and until they decide that they need to break it down and define what each one is individually, I don't think that we're going to make much headway. Other jurisdictions are starting from a much lower bar to set up rules based on the new technology. They're creating it. The SEC is old infrastructure. Switzerland, Gibraltar and the others are new infrastructures, so they can build an adapt quickly to that and accommodate what funds need or companies need as they move forward. So this is still the biggest market, but we can't sit and think we are the biggest market. It's all going to come here. We need to get in front of them. And I don't think we're in front of it. I don't see anything happening other than the fact that they are now aware that there's a new world out there. And that's kind of a shame for the U.S.; they're still in meetings deciding what bitcoin is.

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