Coinbase Chief Policy Officer Faryar Shirzad called on the US Congress to pass clear crypto regulations, warning that continued inaction risks pushing innovation overseas and leaving American consumers unprotected.

In a policy letter titled Why Congress Must Act: Clarity for Crypto and Consumer Protections, the exchange outlined the urgent need for legislative clarity in the digital asset space, emphasizing that blockchain technology is reshaping the global economy.

Coinbase urged lawmakers to create a framework that both fosters innovation and safeguards consumers.

According to Shirzad:

“The absence of clear legislation in the United States stifles potential, leaves consumers exposed, and drives innovation overseas.”

Key legislative priorities

Coinbase’s letter highlighted key legislative priorities, including defining digital assets, granting the Commodity Futures Trading Commission (CFTC) oversight of crypto spot markets, and establishing clear rules for stablecoins and capital raising.

The company also pushed for a regulatory framework that distinguishes between securities and commodities, a point of contention between industry players and the Securities and Exchange Commission (SEC).

Among its policy recommendations, Coinbase stressed the need to protect DeFi and digital commerce from regulatory overreach while ensuring centralized platforms that custody customer funds are held to high transparency and security standards.

The company argued that blockchain networks should allow users to control their digital assets without unnecessary restrictions. The letter warned:

“The risks of inaction are clear. Without regulatory clarity, the US will continue to lose its edge in blockchain innovation.”

Coinbase’s appeal comes as lawmakers debate various crypto-related proposals, with industry advocates urging Congress to provide clear, enforceable guidelines.

Shifting tides

The Biden administration and federal regulators, including former SEC Chair Gary Gensler, maintained a strict stance on digital assets, arguing that many tokens should be treated as securities.

However, the landscape has shifted dramatically toward the positive under the new Trump administration. Industry leaders see an opportunity for more balanced regulatory discussions as lawmakers express a growing willingness to engage with crypto firms and consider legislation that fosters innovation rather than focusing solely on enforcement actions.

Coinbase highlighted that over 52 million Americans hold crypto, which illustrates the importance of legislative action to maintain US leadership in the global digital economy.

Shirzad wrote:

“Passing thoughtful legislation will protect consumers while empowering them to participate fully in the blockchain economy.”

With the regulatory landscape shifting, lawmakers must make a crucial decision: embrace a framework that encourages responsible growth or allow uncertainty to push one of the fastest-growing industries beyond US borders.

Coinbase said that thoughtful regulation could empower developers, protect consumers, and establish the US as a global leader in digital assets, but hesitation could prove costly in an increasingly competitive global market.

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