Jay Clayton, Senior Policy Advisor and Of Counsel to Sullivan & Cromwell and former Chairman of the Securities and Exchange Commission, wrote an opinion piece, “The Peculiar Challenges of Crypto Regulation,” for the Wall Street Journal about the unique difficulties regulators and market participants face with regard to digital assets and the importance of taking action.
Among the factors Jay points out is that the “Uber strategy” of bending taxi regulation with a superior consumer offering will not work in financial services. “[A]s recent markets have shown, the fundamentals of regulation—transparency, limited leverage, liquidity and accountability—remain essential.” Clayton does note that “where crypto can achieve regulatory objectives with greater operational efficiency, it should be embraced.”
Jay recommends that the United States welcome the efficiencies provided by tokenizing payments and the custody of digitals assets. He urges regulators to move forward on stablecoin rules and the SEC to issue requirements for the custody of tokenized assets. In addition, he writes that the SEC and other regulators should go after those engaging in cryptocurrency activities that flout U.S. laws.
Overall, Jay argues that the United States needs to take action as the race to modernize the global financial infrastructure is essential to maintaining the dollar’s reserve status and the continuing global influence of America’s capital-markets policy.
Click here to read the article.