US Needs ‘Rules of the Road’ for Crypto or Risk Falling Behind in Market Leadership

The U.S. must establish clear crypto guardrails or risk falling behind other countries in innovation and market leadership, Linda Jeng, chief global regulatory officer at the Crypto Council for Innovation, told CoinDesk TV’s “First Mover” on Wednesday.

“If you want broad adoption of crypto, you need rules of the road,” Jeng said, and the U.S. is “unfortunately lagging behind.”

Jeng, a Georgetown University law professor and former regulator for the U.S. Securities and Exchange Commission (SEC), said the U.S. must come up with its own rules if it wants to be the leader in crypto innovation.

She said legislation is moving at a quicker pace in other parts of the world. For example, the European Union’s sweeping Markets in Crypto Assets (MiCA) legislation, if adopted, would give its 27 member countries more robust crypto rules. A vote on of the legislation, however, has been postponed until April.

Other jurisdictions, including the U.K., Australia and Hong Kong, are developing and “coming out with consultations,” according to Jeng. But "mixed signals" still exists in some parts of the world, she said. In Asia, for instance, Hong Kong is interested in opening its retail market to crypto, while Singapore would prefer closing it.

“Whoever is a first mover gets to influence the regulations of the rest of the world,” Jeng said.

Getting regulatory clarity for crypto is good for the industry and may also give crypto startups the “ability to access banking infrastructure.” Being able to start a bank account could “resolve the uncertainty” startups have when it comes time to explain their product to regulators.

But it isn’t too late for the U.S., she said.

“We still have a chance,” Jeng said. “If [the U.S.] wants to be the leading digital economy in the world, then we need rules of the road, not just for crypto, but for our private data,” she said.