Cryptocurrencies, according to Fred Ehrsam, could wind up providing more jobs than the Internet if they are handled right.
When it comes to crypto, there’s a risk that regulators would undervalue the potential while exaggerating the risks, according to Coinbase co-founder Fred Ehrsam, who spoke on Bloomberg Studio 1.0 on Tuesday.
When questioned about the likely path authorities will follow with cryptocurrencies, the co-founder of the popular U.S.-based crypto exchange said:
“Crypto is a multifaceted subject, and it’s possible that the United States gets crypto wrong,” Ehrsam added.
He went on to say that while regulators are important in safeguarding investors, he believes that “crypto is the next Internet-sized opportunity for the United States,” and that it “has the potential to create as many, if not more, employment than the Internet.”
More strict crypto regulation has recently come back into the spotlight. “This is a very volatile asset class, and the investing public would benefit from additional investor protection on crypto exchanges,” SEC Chair Gary Gensler said in May at the Financial Industry Regulatory Authority’s annual conference.
The SEC’s regulatory agenda for 2021 makes no mention of Bitcoin, and the regulator has no power over the asset’s trade on larger exchanges like Binance because it is not classified as a security. It can, however, impose restrictions on platforms if they are situated in the United States or provide services to Americans.
However, according to Federal Reserve Vice Chair of Supervision Randal Quarles, US authorities are racing to unify their policies on Bitcoin and cryptocurrency-related concerns and develop comprehensive rules.
A common framework for oversight is a “top priority” for Quarles, who hopes to see some results “soon.” Despite this, American financial regulators have struggled to respond to the cryptocurrency’s meteoric rise. Regulators are also concerned about the market’s dizzying volatility and the lack of an overarching national supervisor.
Ehrsam used the United States’ position as a “de facto financial regulator” for much of the world, as well as a technological powerhouse, to emphasize the potential of decentralized technologies to “square the circle on the privacy internet issues that we’ve been talking about with big tech companies for the last ten years.”
There was also the risk of the United States losing ground to China. According to Ehrsam, the country is already experimenting with its own digital currency, developing blockchain-based initiatives, and hosting the majority of today’s Bitcoin mining.
With China presently cracking down on Bitcoin mining, he believes this is an excellent opportunity for American miners to seize the initiative.