Coinbase CEO Brian Armstrong has expressed concern about a potential ban on retail cryptocurrency staking in the United States. In a Twitter post on February 9, Armstrong stated that he had heard rumors that the US Securities and Exchange Commission (SEC) was considering such a ban.
He described this as a “terrible path” for the US, given the important role staking plays in the cryptocurrency space.
Armstrong tweeted:
“We’re hearing rumors that the SEC would like to get rid of crypto staking in the US for retail customers. I hope that’s not the case as I believe it would be a terrible path for the US if that was allowed to happen.”
Despite not disclosing the source of the claims, Armstrong believes that staking is a critical advancement in the field, offering benefits such as increased stability, security, and a lower carbon footprint.
2/ Staking is a really important innovation in crypto. It allows users to participate directly in running open crypto networks. Staking brings many positive improvements to the space, including scalability, increased security, and reduced carbon footprints.
— Brian Armstrong (@brian_armstrong) February 8, 2023
Armstrong also cited an October 5 blog post from Paradigm, a cryptocurrency investment company, that stated that Ethereum’s switch to Proof-of-Stake and the accompanying staking mechanism do not qualify ETH as a security.
The chairman of the US SEC, Gary Gensler, sparked controversy last year when he suggested that tokens in Proof-of-Stake networks be designated as securities following Ethereum’s transition to a Proof-of-Stake consensus mechanism.
Armstrong criticized the current lack of legislative clarity in the US, which is leading to regulation by enforcement, and causing companies like cryptocurrency exchange FTX to operate offshore.
Armstrong stated:
“Regulation by enforcement doesn’t work. It encourages companies to operate offshore, which is what happened with FTX.”
According to Armstrong, it’s important to ensure that the US fosters the development of new technology rather than stifling it due to a lack of clear regulations. He continued by saying that developing these functionalities in the United States is crucial for national security, especially regarding financial services and Web3.
Last month, Armstrong suggested that Bitcoin be used as a currency in Brazil and Argentina as the two South American countries discussed the formation of a single currency. This prompted questions about the viability of using BTC as a shared currency.
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