Charles Hoskinson, Cardano’s founder, wants the U.S. Congress to create regulations but hand over compliance to software developers. Hoskinson appeared before Congress to answer questions on crypto regulations.
Accordingly, the Cardano founder is pushing for a review of the existing regulations by pitching for a new one backed by software.
Hoskinson Calls for More Clarity
The Cardano founder wants the crypto industry to be given the freedom to ensure compliance, similar to traditional banks.
At the June 23 congressional hearing, Hoskinson points to the self-regulation of banks, adding that neither the SEC nor the CFTC goes to banks to ensure compliance with KYC.
As a result, Hoskinson calls for boundaries to be established by allowing developers to write software to ensure compliance.
The crypto industry is too complex to be regulated, and the two government entities are battling to bring the space under control. The Commodity Futures Trading Commission (CFT) and the Securities and Exchange Commission (SEC) are regulatory agencies on a collision course over jurisdiction overseeing the crypto space in the United States.
Speaking in agreement with Hoskinson, Republican Senator Austin Scott posited that both agencies lack the resources to manage the thousands of crypto firms in the country. Scott added that it is impossible to regulate all the crypto assets without using technology as proposed by Hoskinson.
To further strengthen his claim, Hoskinson points to the ability of cryptocurrencies to perform the regulatory work automatically. He also proposes the development of self-regulating organizations (SRO) for the crypto industry to manage regulatory compliance like traditional banks do.
Cryptocurrency can Regulate Itself
The Cardano Founder stressed that a “self-certification system” would be perfect for the industry to ensure regulatory compliance. This could automatically ensure that guidelines are adhered to by crypto firms until an anomaly is detected. At this point, the regulatory authority would take over to address the anomaly.
Hoskinson noted that the workforce is unnecessary to ensure compliance with crypto regulations. As a result, Hoskinson revealed to Congress that digital tokens could be programmed to prevent transactions until checks are carried out.
The June 23 Congress testimonial indicates that Hoskinson is open to working with regulators to set new rules and ensure compliance. Hoskinson believes that legislation and regulation concerning the crypto space in the U.S. must have guidelines.
According to Hoskinson, new technologies and new assets like cryptocurrencies do not fit within the confines of existing financial laws. Hoskinson wants regulators to create flexible and liberal laws to accommodate emerging markets like cryptos.
Even before Hoskinson’s appearance on the Congress floor, other industry insiders in the United States have called for clear boundaries in the crypto landscape. Like others, Hoskinson believes that a clearer regulatory framework would spare the SEC and CFTC the constant jostling for jurisdiction over the crypto ecosystem.
Hester Peirce, the SEC commissioner, was previously at the receiving end of public condemnation over the commission’s rejection of the Spot Bitcoin ETF launch in the U.S.