Coinbase fears crypto sector could follow semiconductors offshore due to lack of US support
At a time of robust crypto and Bitcoin news coverage, widespread investor interest, and a burgeoning array of new businesses competing within the sector, it almost seems implausible to suggest that this industry is somehow at risk.
And yet, that's exactly what Coinbase Chief Legal Officer Paul Grewal fears will happen if the US doesn't step up its support and commitment to lead the digital asset economy, in what he feels could be a case of history repeating itself if the country drops the ball on nurturing a new technology.
"We know exactly how this will look because we've seen it time and again when this country has ceded its traditional leadership role when it comes to new technologies and other countries have grabbed the mantle,” Grewal told Kitco News correspondent Matt Nesto in the attached video interview.
In likening crypto and digital assets to the present plight of the semiconductor industry, Grewal says there are multiple reasons to ensure the domestic digital asset incubator stays warm.
"For example, there's recently been a tremendous debate in the United States about semiconductors and how over the last 30 years, the industry that we developed, that we grew, has somehow found its way to countries far from the United States and countries that may not always have the United States interest,” he said.
So, while some may argue that this alarmism is unwarranted, this lawyer and former U.S. magistrate judge can't help citing precedent.
"I don't want, and Coinbase doesn't want, to find ourselves 30 years from now asking the same kinds of questions that we're asking about (semis),” he said. "We don't want to be asking in 30 years, ‘Who lost crypto?’”
You Only Get One Chance
Baseball fans often point to big opportunities and at-bats to change the course of a game and history, and from Grewal's purview, the present state of the domestic crypto industry is not all that different, with the country and its 50 million digital assets investors facing a put up or shut up moment of sorts.
"So this is an important technology and Americans have made it clear that they want this as part of their future,” he said, while calling on the country's investors to share their views and send a message to their elected representatives.
"Unless these 52 million Americans and others share their views with their representatives and make it clear to their elected representatives that they want to see sensible, fair, balanced regulation as applied to digital assets, the United States is going to lose this opportunity. We're going to lose this moment,” he said.
This call to action, so to speak, is all part of a broader Coinbase effort to ensure that digital assets are part of the campaign conversation and new standwithcrypto.org website.
"Call your congressman, send an email to your senator, let them know that we all want sensible digital asset legislation passed,” Grewal said. "Not in 5 years, not in 10 years, but now. This is too important an industry, too important a part of our economy.”
More Than Just Tech at Stake
Grewal's argument in support of the domestic crypto industry is not only based on nurturing the new tech and building a strategic geopolitical moat of sorts but it's also tied to keeping millions of good-paying jobs from moving offshore.
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"Do we really want to hand over a million developer jobs and 3 million other high-paying jobs to overseas jurisdictions simply because we can't get our act together in the US?” Grewal said in a recent post on X, the platform formerly known as Twitter.
In short, Grewal said that the Crypto, Blockchain, Web3 as Job Growth Engine story is not some out-there concept.
"It is happening,” he said. "The best research we see right now is that this industry will generate millions of jobs looking ahead,” he added.
"If these jobs are coming, and we know they are, Wouldn't we want to have at least a fair share of those here in the United States? I think the answer to that is an obvious one; Yes.”
That Enforcement Problem
In addition to industry support, national security and job creation, Grewal also took aim at the current regulatory environment.
"We think (enforcement) is appropriate, indeed, laudable that the Department of Justice has gone after the scammers, the fraudsters that target our industry, but that's no reason to throw out the entire baby with the bathwater,” he said.
In pointing to the fact that over 80% of the G-20 countries have already adopted cryptocurrency regulations or frameworks or are on their way to doing so, Grewal said it is imperative for the US to do more in order to be at the forefront of guiding the industry.
"The United States is falling behind. That's the bad news,” he said. ”The good news is there's still plenty of time to catch up,” he added, noting a number of bills that are currently pending in Congress. "The U. S. can still get this right, but it's time for us to act.
By
Matt Nesto
For Kitco News
Tim Moseley