The U.S. should look to China for what not to do when it comes to regulating the crypto industry, according to Katie Haun, a partner at Andreessen Horowitz.
“This is an opportunity for the United States because we should be doing the exact opposite in my mind in this realm of what China is doing,” Haun, a former federal prosecutor, said at CNBC’s Delivering Alpha conference.
Earlier this year, China created its own digital currency, the digital yuan, which the People’s Bank of China is controlling. The currency aims at replacing some of the cash in circulation. China has run real-world trials for its digital currency in many cities, including Shenzhen, Suzhou, and Chengdu.
Bitcoin and cryptocurrencies aren’t controlled by a central authority such as the government or a bank, and crypto enthusiasts say that is the only way they can be trusted.
Haun predicted that China will “tie trade, tie loans, tie other assistance to the use of essentially their stablecoin,” which is a type of digital currency that’s often backed by a currency. The timing of the digital yuan launch could also be linked to Beijing’s efforts to crack down on the wider crypto market.
Haun added the United States has followed the correct approach on central bank digital currencies, or CBDCs, so far. “I’m glad we’re studying as a country CBDCs, but we’ve publicly said as a country that we’re going to keep studying it for a couple of years,” she said. “I think it’s really important that policymakers and private industry in the U.S. work together.”
Haun also talked about the regulatory debate in the U.S. and said it’s a “myth” that crypto industry players are opposed to all regulation. “It’s not that the industry does not want regulation,” Haun said. “It wants clarity, but it also does not want to be treated as a monolith.”
Haun gave the example of non-fungible tokens, or NFTs, which are digital collectibles, saying “Why should that be regulated as a financial product and service? We don’t think it should be. Regulation cannot be one size fits all.”
Haun also expressed her disappointment about the SEC penalizing crypto companies like Coinbase trying to be compliant. Haun is a board member at Coinbase, which recently stopped its plan to introduce a lending product after CEO Brian Armstrong revealed that the company had received a Wells Notice from the SEC. The notice threatened to sue if Coinbase went ahead with the offering. Haun said that some in the industry are getting punished despite “good faith efforts” while others, who are skirting regulations and laws, “are really getting a free pass.”
