Charles Hoskinson, the founder of Cardano has spoken to Congress about cryptocurrency regulation, in a testimony that will help Congress decide how to approach regulation of the cryptocurrency industry.
The US House of Representatives committee on crypto and blockchain called in Charles Hoskinson on Thursday, as a key figure in the crypto industry, to speak on cryptocurrency regulation. The Cardano founder made a proposal that would see software developers handling compliance matters.
Hoskinson suggested something similar to the way in which the banking industry operates with KYC/AML, noting “it’s not the SEC or CFTC going out there doing KYC/AML; it’s banks. They are the ones on the front line”. He added:
“What I am suggesting is a public-private partnership. However, there is a need to have boundaries. Then, innovators like us can write the software to make it happen.”
The proposal outlined by Hoskinson would mean that compliance comes from within the crypto industry, and not directly from the regulators themselves.
“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.”
The Securities and Exchange Commission (SEC), and the the Commodity Futures Trading Commission (CFTC) are currently in the midst of deciding who has authority over the regulation of the crypto markets, with the CFTC arguing that thy are the only U.S. regulatory body that has experience regulating markets for Bitcoin and crypto.
One of the key issues with the regulation of cryptocurrencies is that one single agency is unlikely to be able to regulate and oversee the many thousands of cryptocurrencies on the market. Hoskinson noted in his testimony, that cryptocurrencies have the ability to carry out much of this regulatory work automatically, suggesting a “self-certification system” that automatically monitors compliance.
Hoskinson’s testimony includes a request for clearer boundaries and guidelines from the U.S. regulators, adding that his “knowledge and network are always available to this subcommittee to aid and assist in the legislative process”.
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