Brian Armstrong, co-founder and CEO of crypto exchange Coinbase, seems to think so and argued that it should be considered in the same class as goods and infrastructure vital to the US economy.
The reason for his impassioned plea may have to do with the recent SEC crackdown on crypto, including an investigation into whether Coinbase itself improperly allowed Americans to trade digital assets that should have been registered as securities.
“One of the strongest political arguments in favor of cryptocurrency is that it is a national security issue,” he posted on Twitter, in a potential attempt to draw attention to new attention to the legal gray area that crypto falls into.
Armstrong said the industry should not be allowed to go the way of microchips, whose advanced processors found in Apple devices are made exclusively in Asia, or for that matter fifth-generation mobile networking equipment that is dominated by the Chinese Huawei, the Swedish Ericsson or the Finnish group Nokia.
“The United States failed [out] on semiconductors and 5G, which is now largely manufactured overseas. He can’t afford to have the cryptocurrency overseas as well,” he wrote, adding that this was valid for all countries.
For years, Coinbase and other industry players have pleaded with the agency to come up with clear rules on how securities law applies to the crypto realm. And for years, the SEC refused to do so, instead pursuing a one-sided approach known as “regulation by enforcement” that left companies guessing what the agency would do.
“Regulation by enforcement is a terrible deterrent, and rhetoric matters,” Armstrong wrote. “We have already seen a huge amount of crypto talent, asset issuers and startups go overseas.”
Coinbase’s CEO may be right, as many countries would envy the ability to lure businesses away from Wall Street. The strength of the US dollar is not only a function of its role as the world’s reserve currency, but also of its deep financial markets that absorb excess capital from abroad.
The City of London, the only financial district that rivals Manhattan, has also tried to guard against a large-scale exodus of money or talent with the new government of British Prime Minister Liz Truss proposing remove a limit on banker bonuses.
High-paying jobs in financial services are not the only attractive sector that not only proves vital to economic productivity but also helps increase a government’s tax base. As the CEO of Coinbase pointed out, governments are also realizing the need to produce semiconductors on land.
Sign up for the Makeshift Features mailing list so you don’t miss our biggest features, exclusive interviews and surveys.