Integrity as master plan for crypto adaptation in the USA

Although more and more companies are focusing on their own block chain projects, the technology still ekes out a niche existence. Many potential users lack the technical background, so that mainstream adoption of the technology is still a long way off. However, more and more crypto and block chain companies are pushing for a comprehensive introduction of the technology. After all, real advantages can be achieved through block-chain-based business models. These companies include Ripple and Coinbase. Executives of both companies have now drawn up a master plan to drive the adaptation in the US market. A working group is to increase the integrity and transparency of the market for digital assets.


Integrity as a cornerstone of the mainstream

In a press release dated 23 January 2020, the Blockchain Association announced that it had set up a Market Integrity Working Group. The new working group is intended to advance the development of public policies. In particular, the transparency and fairness in the crypto market should benefit.

The chairmen of the working group are Breanne Madigan and Rachel Nelson. Madigan comes from Ripple where he heads the Global Institutional Markets Department. Nelson works at Coinbase as Senior Director, Associate General Counsel.

As the Blockchain Association points out in its press release, the integrity of the cryptocurrency markets is a hurdle. Overcoming this hurdle is crucial for the successful institutional acceptance of digital assets. The integrity of the entire market also plays a decisive role from the perspective of the regulatory authorities.


Legislation should improve integrity

Legislation is needed for the successful introduction of the technology and to build consumer confidence. It is precisely this legislation that Congress should enact in order to create the basis for proper and securely functioning crypto-markets. For example, such legislation could lead to the Commodity Futures Trading Commission (CFTC) extending its jurisdiction to the regulation and supervision of trading venues for digital assets.

Consumers already have to rely on the trading platforms for digital assets in order to actively participate in this market. The functional scope of a crypto exchange is similar to that of a classic trading place or broker. Nevertheless, buyers and sellers of crypto-currencies are dependent on these crypto exchanges to trade virtual currencies.


Conclusion: Market integrity as the key to crypto-adaptation

The current status quo poses a serious challenge to crypto exchanges in the USA. High regulatory requirements, state legislation and non-transparent processes prevent crypto exchanges from achieving the hoped-for market penetration. The current situation favors classic stock exchanges and brokers.

The newly created “Market Integrity Working Group” is to present solutions that result in an immediate improvement of the initial situation. With Breanne Madigan and Rachel Nelson, two established managers from Ripple and Coinbase will take over the leadership of the working group. The first step is to establish market integrity in the block chain and crypto sector. This includes the introduction of new legal frameworks and increasing transparency towards users. Through a successful approach, the working group wants to create more interest in digital assets on the part of institutional and private investors. In the end, the focus will be on adaptation on the US market.

In my view, the convening of the working group is an important step on the way to the final adaptation of cryptocurrencies. In particular, the adaptation of regulatory requirements as well as a level playing field between exchanges of digital assets and traditional stock exchanges could be an important success factor. The coming months will show whether the project will achieve the desired success.