The U.S. Desperately Needs Regulatory Clarity
A market outlook report from ETP provider 21Shares reveals that the push for stringent regulations in the crypto industry by U.S. lawmakers is causing businesses to move overseas. The report states that the lack of regulatory clarity has led to offshore exchanges retaining the majority of spot and futures trading volume in recent years. This echoes criticism made by Coinbase’s chief legal officer, Paul Grewal, who described the country’s enforcement-only approach as increasing consumer risk and driving innovation out of the country.
Crypto Competition Arises in Light of the U.S. Regulatory Approach
The report also highlights how Binance’s exit from the U.S. may benefit Coinbase, despite its ongoing lawsuit with the SEC. It suggests that Coinbase could gain further legitimacy and become the leading exchange in the U.S. due to this competition. Additionally, the report mentions increasing jurisdictional competition globally, with the U.K. and Hong Kong being prime examples. The main question for 2024 is whether regulators in the U.S., the largest market in the world, will provide much-needed regulatory clarity.
The U.K. May Become a Crypto Epicenter
Despite being the largest crypto market globally, the report suggests that the United Kingdom could take over as a leading crypto hub in 2024. It cites statements from Andrew Griffith, former economic secretary to the Treasury, who expressed the government’s ambition to make the U.K. a global hub for cryptoasset technologies. Several crypto firms are already operating within the U.K., including Kraken, BitStamp, and Gemini.
Hot Take: U.S. Regulations Drive Crypto Businesses Overseas
A recent market outlook report from 21Shares highlights how strict regulations in the U.S. are causing crypto businesses to move overseas. The lack of regulatory clarity has led to offshore exchanges dominating spot and futures trading volume. This approach has faced criticism from industry insiders, including Coinbase’s chief legal officer and CEO. Meanwhile, competition is arising in the crypto market due to Binance’s exit from the U.S., potentially benefiting platforms like Coinbase. The report suggests that the U.K. may become a leading crypto hub, attracting businesses with its supportive regulatory environment. With the U.S. lagging behind in terms of clarity, it remains to be seen how this will impact the global crypto landscape in 2024.
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