The Scoop
Coinbase, the largest US cryptocurrency exchange and one of the industry’s top political donors, on Wednesday outlined its legislative priorities after spending tens of millions of dollars that helped Republicans win control of Washington in 2024.
The blueprint, first reported by Semafor, could be an influential roadmap for Washington as the industry transitions from being a regulatory target under the Joe Biden administration to an embraced sector under President Donald Trump.
A major change proposed by Coinbase would be to shift oversight of crypto spot trading to the Commodity Futures Trading Commission because the firm considers Bitcoin, Ethereum, and other similar digital assets to be commodities instead of securities, an idea challenged by the bigger Securities and Exchange Commission under Democratic leadership. That would overhaul how agencies regulate the nearly $3.3 trillion market.
Though the regulators can implement some industry-sought changes themselves, Congress will need to pass much of the rest. Coinbase, led by Brian Armstrong, who publicly tussled with the SEC under the Biden administration, recently brought on former Sen. Kyrsten Sinema, I-Ariz., and Chris LaCivita, Trump’s co-campaign manager.
“Blockchain technology and digital assets are reshaping the global economy,” Coinbase’s chief policy officer, Faryar Shirzad, wrote. “Yet, the absence of clear legislation in the United States stifles this potential, leaves consumers exposed, and drives innovation overseas.”
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Coinbase’s push to give the CFTC an expanded role in overseeing crypto is in line with a GOP-led bill the House passed last Congress, over the objections of some Democrats concerned with illicit finance and consumer protections. Coinbase also wants decentralized finance, smart contracts, and digital commerce platforms “explicitly carved out,” plus state or federal regulation for exchanges and other so-called centralized platforms.
“This provides consumers with confidence while avoiding unnecessary interference in decentralized systems,” Shirzad writes.
Coinbase says that any legislation must provide legal protections to developers of blockchain systems and allow customers to use so-called self-custody wallets that give them sole control over their digital assets.
The exchange also says that customers should be allowed to stake, run nodes, and perform peer-to-peer transactions — what it calls “foundational rights” of “the blockchain economy” — and that intermediaries like exchanges should be required to comply with “transparency, security and accountability” rules.
So-called guiding principles include “avoiding unnecessary complexity” as well as trying to “minimize disruption to existing frameworks,” “incentivize innovation,” and take a light-touch approach to decentralized finance, smart contracts, and digital commerce platforms.
Notable
- Coinbase’s Wednesday announcement is just the latest way that crypto firms are looking to cement their influence over Washington after they helped deliver wins for many on the Hill.
- Republicans on the Senate Banking and House Financial Services committees have already taken key steps toward advancing stablecoin legislation, while one top Democrat champions her own approach.