Coinbase Also Leads in Political Action

Coinbase is a leader in the US cryptocurrency industry; it has formed a political action committee. Coinbase is the most widely followed and influential digital currency exchange in the US. Along with Gemini, it is among the early leaders in government engagement to promote publicly -beneficial regulation. Coinbase also works with the ownership of the NYSE and provides valuation services for crypto-derivatives traded on the Chicago Board. The Coinbase PAC represents a further step towards mainstream integration; public acceptance of digital currency will likely depend on confidence based in some form of regulation.

- Political Action is Important

The modern trend in business to government relations involves supporting leadership that advances  interests favorable to the industry. This is a wrong-headed approach that verges on corruption.  An earlier approach allied business interest with the pubic interest.  GM, for example, could fairly support leaders that advocated for a growing economy but not those that advocated for cars over public transit. There is no valid public interest in opposing public transit.  

Coinbase must decide whether to pursue the corrupt model that many do today- such as overturning clean water rules in the face of various epidemics of water contamination- or a more reasonable approach that does not endanger the financial well-being of its intended customers. Thus far,  their political activity suggests they have taken the high road. They have supported a well-qualified candidate that was a national expert in financial policy. This type of action has a clear benefit for the cryptocurrency industry and the public.

- Why Regulation is Important to Digital Currency

Digital currency is not new to the US; it has existed in many forms from redeemable stamps to travel miles. The advent if blockchain technology made digital currency a free-standing form of exchange. The blockchain record was proof of value, ownership, and existence. The public understanding of cryptocurrency is opaque and blockchain is thrown around as a symbol of reliability, but it is not widely understood. The dominant impressions of cryptocurrency are alternatively great and terrible.  The public grabs rumors and reports of fraud, scandal, and loss of funds. The public also eagerly grabs reports of Bitcoin rising from a few hundred to $15,000. The truth lies somewhere in the blend of the sensational and the ordinary. Regulation may be a key to growing a wide public acceptance of cryptocurrency in the US and to increased participation by hedge funds and other institutional investors.

- The Flavors OF Government Regulation

On a global basis the more widely circulated news is of government Actions that block, ban, or limit digital currencies. This includes reports from China and India.  There is far less discussion f the nations and regions in which blockchain and cryptocurrency has gained a strong foothold and, in many ways, exceed official money as a preferred medium of exchange. In the US, the tide seems rise slowly but surely. People see signs of Bitcoin ATMs and reports of hedge funds that seek crypto-derivatives .

The SEC issued an opinion that separated Bitcoin and Ethereum from other types of currencies that have ties to projects or sponsors. The Bitcoin type is a general currency rather than an investment under the Securities laws.  The clarification aids acceptance of the general type currencies. New York State is an example of responsive regulation. The state licenses cryptocurrency exchanges as financial services businesses and provides a minimal form of oversight.  The official oversight is a value enhancement that exchanges can use to bolster acceptance of digital currencies and promote understanding.

- The Future was Yesterday

Coinbase PAC will likely attract other players and will inspire more financial interaction with candidates and causes. The opportunity is particularly ripe because the Republican Party has abandoned governance in favor of following the peculiar agenda of one person. (The public demands positive action on  a host of priorities that the GOP has diminished including: healthcare, environmental protection, climate change, student debt, job training, cybersecurity, and an open Internet) Recent events portray an inexplicable transformation of the Party of Lincoln into the Party of Putin.

The recusal of a major political party from the concerns and demands of the population it governs has happened before.  The vacuum must be filled, and the demands of Generation Z and Millenials differ from the older generation.  This is also the segment of the population most likely to adopt cryptocurrency particularly as participants in the global economy, IT age,  and the sharing economy. The digital currency industry is far behind the curve that it requires for sustainable growth, but the Coinbase PAC is  a small step by and industry giant.