Hoskinson thinks regulations for the cryptocurrency sector should be more clearly stated, but compliance should come from the sector itself rather than from regulatory bodies.
Charles Hoskinson, a co-founder of Cardano, told the Agriculture Committee of the U.S. House of Representatives that regulations for cryptocurrencies should be made, but that it should be up to software developers to ensure compliance.
Hoskinson compared the ideal framework for cryptocurrency regulation to the way financial self-regulation operates during a congressional hearing on June 23, telling lawmakers that “it’s not the SEC or the CFTC going out there doing KYC-AML, it’s banks.”
“It’s a public-private partnership. What needs to be done is to establish those boundaries, then what we can do as innovators is write software to help make that happen.”
Two financial regulators vying for control of the cryptocurrency business are the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
According to Republican Georgian Representative Austin Scott, “it’s not possible to regulate all these currencies.” He claimed that neither the SEC nor the CFTC have the personnel to monitor the thousands of cryptocurrencies available on the market.
Hoskinson retorted that since cryptocurrencies can store and transport data, a lot of this regulatory work may be done automatically. Additionally, he used it as grounds for approving the creation of self-regulating organizations (SRO) by the cryptocurrency sector to direct regulatory compliance, exactly like the private banking sector does.
According to Hoskinson, the sector could develop a “self-certification system” that would automatically check for compliance up until an irregularity is found, at which time a financial body would look into it.
Hoskinson proposed that even quadrupling the Internal Revenue Service’s (IRS) strength would not be sufficient to audit every American, demonstrating further why personnel should not be an issue for crypto regulation.
As an alternative, Hoskinson informed Representative Scott that cryptocurrency can be configured to delay transaction settlements until legally required checks are made.
Hoskinson expressed his eagerness to collaborate with federal regulators on the creation of new rules in a statement made on June 23 and published on the IOHK website, saying that the blockchain industry’s adherence to U.S. law and regulation “must be a guiding value.”
“However, this is a new technology and a radically new asset class that can not readily fit within the confines of the laws and tests created almost a century ago.”
Hoskinson’s calls for more distinct lines in the regulatory framework for cryptocurrencies are similar to those expressed by other industry insiders in the United States in December.
The author of this article referenced Cointelegraph for information.