It’s a tricky balance, but Ethereum Co-Founder Joseph Lubin believes the cryptocurrency market should embrace regulators though he also points out it’s vital not to stifle innovation.
Lubin, who is at the helm of ConsenSys, welcomes regulators into the cryptocurrency space both in the United States and in other parts of the world. He made the comments to Bloomberg at Paris’ Viva Tech summit. Perhaps his remarks added some relief to the market, as the leading cryptocurrencies are currently trading in the green again.
“It is really valuable to have regulators in this space taking a look at some of the complicated practices in much less regulated situations. So, whether it’s with respect to cryptocurrencies, and cryptocurrencies — in my opinion — should remain unfettered because they have tremendous use cases, or whether it’s tokens representing securities or other assets, and how that maps into securities law, we’re very happy to see the regulators,” said Lubin.
If Lubin isn’t worried about regulation, it’s pretty safe to say that the balance of the cryptocurrency community shouldn’t be, either. The important thing to note is that regulators don’t appear to be turning a blind eye to innovation, either, which may explain why they haven’t responded to the market with some blanket policy or ban like China. Policymakers too are looking to strike a balance, and perhaps that’s a function of blockchain veterans like Lubin making the vision of decentralization clear.
Regulators have yet to provide a clear-cut definition of what comprises a security token and what does not. Perhaps they should ask Lubin if they haven’t already. In order for the market to operate as it was intended, there needs to be a distinction between what are security tokens and what is not. Despite the fact that US SEC Chairman Jay Clayton said he has yet to see a token that’s not a security, he may just not be looking for the right characteristics.
Lubin said that as far as regulation is concerned, he’s honed in on securities laws. He said they are able to issue both security and utility tokens.
“We’re focused on getting very clear definitions and helping regulators around the world understand that there are these network business models that benefit from membership tokens or tokens that represent consumption of scarce resources. And as long as these projects are selling tokens to token buyers that make use of the token and they’re not selling in large quantities to speculators or hoping to make money by the actions of others, that is a good clean definition of a consumer token,” said Lubin, who added that is “absolutely what ether is” and described it as a “crypto fuel.”
While programmers like Vitalik Buterin and Lubin have made it clear that their attention is not on trading, the ConsenSys chief didn’t shy away from questions about the US probe into possible price manipulation. Lubin pointed to other explanations for the dramatic swings in the bitcoin price.
“It could be just because the total value of these monetary bases are small and it’s a very young technology and lots of news is coming out. But traders are sophisticated and traders will do what they can get away with,” he told Bloomberg.
The blockchain conferences are unfolding fast and furious this year, with the next one, dubbed the Blockchain for Social Impact Coalition Conference scheduled for June 1 in Washington, D.C.
Featured image from Flickr/@thelastminute.