Coinbase Urges Congress to Pass Crypto Legislation, Provide Regulatory Clarity

Coinbase is pushing Congress to pass legislation that provides regulatory clarity for the cryptocurrency industry, arguing that inaction leaves consumers vulnerable and drives innovation overseas.

Coinbase has urged Congress to pass legislation that provides regulatory clarity for the cryptocurrency industry, warning that inaction leaves consumers vulnerable and drives innovation overseas.

In a two-page statement to Congress, Coinbase Chief Policy Officer Faryar Shirzad highlighted the urgent need for a framework that fosters responsible innovation while protecting investors.

Shirzad's statement emphasizes the economic opportunities, financial inclusion, and innovation offered by blockchain technology and digital assets. However, he stresses that clear rules are crucial for developers to operate effectively and for consumers to have adequate protection in this rapidly evolving landscape.

"Blockchain and digital assets aren’t just technological advancements; they open doors to financial freedom, innovation, and economic empowerment," Shirzad writes in the statement. He goes on to warn that the United States risks losing its leadership in blockchain technology as companies seek friendlier regulatory environments abroad.

Shirzad outlines several key priorities for legislation aimed at establishing a balanced regulatory framework for digital assets. First and foremost, there is a need for clear definitions that differentiate between securities, commodities, and other types of tokens. This clarity is essential for providing certainty to both investors and developers in the rapidly evolving digital landscape.

Additionally, there is strong support for granting the Commodity Futures Trading Commission (CFTC) oversight of the crypto spot market, particularly for major digital assets classified as commodities.

The Securities and Exchange Commission (SEC) should also establish definitive guidelines that allow blockchain projects to raise capital without categorizing every token as a security. In terms of stablecoins, regulations should ensure transparency, full backing, and oversight that promotes competition and innovation while preserving consumer confidence, Shirzad writes.

Consumer protections and urgency in congressional action

According to Shirzad, effective legislation must be simple and accessible while integrating with existing financial regulations. He argues that lawmakers should encourage innovation by providing clear pathways for developers to build decentralized systems without unnecessary restrictions.

At the same time, centralized exchanges and custodians must be held to high transparency and security standards to protect consumers.

Shirzad also stresses that consumer protection does not mean overregulation. Excessive restrictions could drive blockchain development offshore, weakening the U.S. economy and limiting consumer access to crypto markets. Instead, Shirzad calls for a framework that safeguards investors while allowing DeFi and other innovations to thrive.

Shirzad concludes by highlighting the urgency of congressional action in passing comprehensive cryptocurrency legislation. Without swift action, he warns, the United States will continue falling behind in the global blockchain race. Developers and businesses will look to other jurisdictions with clearer policies, and consumers will remain exposed to fraud and systemic failures.

"Passing comprehensive crypto legislation will protect consumers, encourage responsible innovation, and position the United States to lead the digital economy," Shirzad writes in the statement.