Thank you for the opportunity to comment on the draft model regulatory framework for state digital currency regulatory regimes. The more methodical approach that you are taking at the Conference of State Bank Supervisors represents an improvement over other, notable U.S.-state-level regulatory proposals.
Regulation in the field of digital currencies must meet high standards. Digital currencies such as Bitcoin have passionate advocates because of the potential benefits Bitcoin holds out not only to American consumers, but to billions of people around the world who are financially marooned and needlessly kept in poverty simply because their countries lack financial integration.
If undue regulation were to hinder the growth of Bitcoin, that would be very costly in terms of jobs and economic growth, which in parts of the United States and many places worldwide means access to food, medicine, housing, and adequate educational opportunities for children. Bitcoin is not only a substantial potential engine for global financial inclusion, but also an opportunity to increase liberty and dignity for many populations, to provide law-abiding people with greater financial privacy, and to offer a more stable money supply in countries with poorly managed currency.
Fundamentally, any regulatory proposal should pass a cost-benefit analysis. The public should be able to ascertain how and how well the regulation serves public interest goals and makes society better off. The CSBS policy statement and draft model regulatory framework present an opportunity to explore what policies and what regulations will help secure Bitcoin’s benefits for the public, producing net benefits for consumers in the United States and worldwide.