How Far Behind is the United States from a Regulatory Perspective and What Can it Do to Catch-Up to or Surpass Smaller Nations?

Bill Taylor, Chief Investment Officer, Fintek Capital LLC, discusses what the United States could do to keep (or even bring) digital asset funds onshore. Bill focuses on some of the strengths of the US and obstacles facing smaller jurisdictions. In this segment, Bill also discusses the significance of the accredited investor rule, pending federal legislation to broaden the definition of accredited investors and tokenizing collectibles.


Dara Albright: Bill, as far as timing is concerned, how far behind are we or when do you anticipate the U.S. catching up?
Bill Taylor: You'll see some adaptions of rules, and I think we will catch up probably six months to a year-and-a-half from now. That’s still spotting a lot of other countries—whether it be Switzerland, Gibraltar, or others—a very big head start. For example, in Japan bitcoin is used already for all of its legal tender. You can buy airline tickets with it. You can buy everything. Korea and China, basically everything is cashless right now, but they're starting from a much lower infrastructure base. So how long will it take us to catch up? It’s anybody's guess. It will come in dribbles of probably defining digital assets as a class and letting that be the hub, the leaders of it, before we get into the others.

On the time basis, moving overseas sounds really good. The problem that we had with the fund is we needed to move offshore. That sounds really wonderful, but as more funds came on and wanted to do it, and more people wanted to do and found they couldn't in the U.S., they found that they needed to move overseas. So you have this whole group of people who want to be regulated, do things correctly and move out there. This flood of people start out and they go to Switzerland and Gibraltar and they got really busy. All of a sudden it may be cheaper to do over there, which it is, except for Switzerland, but the other ones are cheaper to set up. They're cheaper to do what they're doing. But everybody flocked there, which means they got all bogged down timing wise.

And in some jurisdictions, Gibraltar specifically, Gibraltar's a country of 35,000 people with 45 people unemployed. They don't have a workforce. All of a sudden their workload goes up exponentially. They don't have workers or people on the administrative side, the tax management side, the legal side to handle all the new business. The time that you would have saved setting it up became almost a detriment because they could do it at that quick, but all of a sudden they got busier and it got harder to do. It strung out the process much longer than we envisioned. We are actually looking at coming back on shore but changing a few things. Like I mentioned, we can't do digital gold, physical gold, but you can do digital or you can do a digital token offering using a gold ETF and a crypto overlay. It's basically 99.9% the same thing. And you come under normal securities laws here in the U.S. As you redefine these things and we play within the rules as our SEC and everything else changes some rules this way, some of the funds and other people move off shore and will budge the other way off their mandate, and they'll meet somewhere in the middle. A lot of the business may come back on shore, but it won’t be in its intended design. It'll be pretty much right on.

Dara Albright is a recognized thought provoker, advisor, author, and speaker on topics relating to fintech, digital finance, cryptofinance, peerfinance, crowdfinance topics, IPO execution, investment banking and corporate communications.

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