Coinbase has put forward a legal blueprint for digital assets, encouraging the US Securities and Exchange Commission (SEC) to set up clearer guidelines.
The proposal follows a request from SEC commissioner Hester Peirce, who leads the crypto task force of the agency, for input on the clarity of the regulations.
According to the exchange, this step corresponds to growing efforts to create a well-defined framework for the crypto industry.
Coinbase’s Chief Policy Officer Faryar Shirzad said:
“A transparent and cooperation process will help the agency and the market participants shape regulations that can provide clarity and security for developers, clear rules for industry and effective protection for investors.”
Important aspects of Coinbase’s proposal
Coinbase’s recommendations focus on four core elements that are essential for a well -functioning market for digital assets.
The stock market emphasizes the need for the SEC to set up a clear taxonomy that distinguishes digital raw materials from effects. According to Coinbase, digital assets that do not grant any rights in a business enterprise should not be classified as raw materials, no effects.
Coinbase argued that distinguishing digital raw materials and effects would enable traditional financial instruments to move on-chain. This shift could improve global liquidity, increase assets transfers and lower operational costs by eliminating inefficiencies that are linked to outdated paper market systems.
The exchange also insisted on the SEC to specify its classification of secondary market sales of digital raw materials as securities transactions. It argued that, regardless of how a digital active is initially published, secondary market transactions are not allowed to be treated as securities trade.
In addition to sec-specific reforms, Coinbase also called on the agency to postpone a broader development of the market framework to the congress. It noted that although the agency plays a role in shaping regulations, the legislators must be those who define regulatory boundaries and resolve existing uncertainties.
The exchange further argued for regulations that support the growth of tokenized effects. It proposed targeted policy changes to coordinate rules with the economic reality of blockchain, which unlocking new opportunities in financial markets.
Shirzad concluded:
“The direct tackling of these key points will provide clarity that will enable the SEC, other federal agencies and the congress to answer additional questions that are vital for the future of our industry in the US. Clear guidance will also quickly accelerate the approval of more Onchain tools that lead the Traditional Finance.”