Nick
Weaver
on
Regulating
Cryptocurrency
Nicholas
Weaver
wrote
an
excellent
paper
on
the
problems
of
cryptocurrencies
and
the
need
to
regulate
the
space—with
all
existing
regulations.
His
conclusion:
Regulators,
especially
regulators
in
the
United
States,
often
fear
accusations
of
stifling
innovation.
As
such,
the
cryptocurrency
space
has
grown
over
the
past
decade
with
very
little
regulatory
oversight.But
fortunately
for
regulators,
there
is
no
actual
innovation
to
stifle.
Cryptocurrencies
cannot
revolutionize
payments
or
finance,
as
the
basic
nature
of
all
cryptocurrencies
render
them
fundamentally
unsuitable
to
revolutionize
our
financial
system—which,
by
the
way,
already
has
decades
of
successful
experience
with
digital
payments
and
electronic
money.
The
supposedly
“decentralized”
and
“trustless”
cryptocurrency
systems,
both
technically
and
socially,
fail
to
provide
meaningful
benefits
to
society—and
indeed,
necessarily
also
fail
in
their
foundational
claims
of
decentralization
and
trustlessness.When
regulating
cryptocurrencies,
the
best
starting
point
is
history.
Regulating
various
tokens
is
best
done
through
the
existing
securities
law
framework,
an
area
where
the
US
has
a
near
century
of
well-established
law.
It
starts
with
regulating
the
issuance
of
new
cryptocurrency
tokens
and
related
securities.
This
should
substantially
reduce
the
number
of
fraudulent
offerings.Similarly,
active
regulation
of
the
cryptocurrency
exchanges
should
offer
substantial
benefits,
including
eliminating
significant
consumer
risk,
blocking
key
money-laundering
channels,
and
overall
producing
a
far
more
regulated
and
far
less
manipulated
market.Finally,
the
stablecoins
need
basic
regulation
as
money
transmitters.
Unless
action
is
taken
they
risk
becoming
substantial
conduits
for
money
laundering,
but
requiring
them
to
treat
all
users
as
customers
should
prevent
this
risk
from
developing
further.
Read
the
whole
thing.
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