Experts argue that the lack of regulations and standards in the digital asset industry within the United States is causing valuable business prospects and advancements to move to other countries, such as European nations and the UAE, which have established adequate frameworks for the industry.
Friedman Shares Her Worries
The Policy Head of the Ripple blockchain, Susan Friedman, has recently conveyed her apprehensions regarding the movement of cryptocurrency industry participants to Europe owing to the absence of unambiguous regulatory directives in the United States.
However, Friedman believes that concerns about innovation relocating abroad are not overstated, as the crypto industry is already experiencing a shift of skilled individuals to Europe, where the regulatory framework is evident, thanks to the newly introduced MiCA regulations.
Related Reading: Ripple and Other Key Investors Move 218 Million XRP as Price Recovers
MiCA is an acronym for Markets in Crypto-Assets Regulation, a proposed collection of regulations to establish a standardized regulatory structure for crypto assets throughout the European Union (EU). In September 2020, the European Commission introduced the regulation, which is projected to be implemented in 2024.
Friedman’s remarks come when the crypto sector becomes increasingly anxious about the absence of regulatory transparency in the United States. Despite multiple appeals for explicit directives, regulatory authorities in the US have not yet furnished a comprehensive structure for the industry. Consequently, numerous players are seeking prospects in other regions.
Moreover, according to the Policy Head of Ripple, the regulatory inactivity in the United States has a tangible impact on the nation, leading to a loss of investment and jobs. As a result of numerous crypto firms choosing to establish themselves in Europe, the US is at risk of forfeiting a substantial portion of the industry’s potential for growth.
Related article: New Job Openings at Ripple Show Sign of Growth Despite Market Conditions & Legal Battle
Stiff Regulation by Enforcement
In spite of the lack of explicit regulations, the Securities and Exchange Commission (SEC), one of the primary regulatory bodies in the United States, has initiated several crackdowns on crypto companies, including Ripple blockchain, Coinbase crypto exchange, and Paxos, which issued the BUSD stablecoin.
The House Financial Services Committee’s (FSC) Republican members released a statement yesterday, condemning the SEC’s approach of enforcing regulations through crackdowns on digital assets, which they called a “regulation by enforcement” regime.
The FSC expressed apprehension regarding the SEC’s regulatory methodology, contending that the “regulation by enforcement” approach is compelling innovation in the digital asset ecosystem to shift to other countries, thereby jeopardizing American competitiveness.