What You Need to Know
- Crypto Council for Innovation will focus on government relations, education and the publication of research on key issues.
- Its members are Fidelity, Coinbase, Square and Paradigm, an investment firm which convened the group.
- The council has formed at a time of growing interest in crypto asset but considerable caution among regulators.
Fidelity Investments and three other investment firms have formed a trade group to educate the public, governments and institutions about cryptocurrency assets and to promote “responsible regulation” of those assets, they say.
In its inaugural announcement, the Crypto Council for Innovation said it aims to show the promise of “this transformational technology” and to separate “fact from perception” through government relations, education and the publication of research on key issues.
“The recipe for good policy requires convening regulators and industry to devise solutions together,” according to the announcement.
The lobbying group has formed at a time when a growing number of financial firms, including Fidelity, have filed applications with the SEC to trade a Bitcoin ETF, U.S. Treasury Secretary Janet Yellen has criticized Bitcoin as “highly speculative and staggeringly “inefficient” in processing transactions and the Federal Reserve has nixed the idea of a central bank digital currency for now. Regulation is key to wide adoption of Bitcoin and other cryptocurrencies, according to S&P Global Ratings.
In the meantime, crypto enthusiasts are eagerly awaiting confirmation of former CFTC chairman Gary Gensler as the next SEC chairman, hoping that the current MIT professor who teaches and researches blockchain technology, digital currencies and financial technology will embrace crypto investments.
Testifying before the Senate Finance Committee at his confirmation hearing last month, Gensler said, “Bitcoin and other cryptocurrencies have brought new thinking to payments and financial inclusion, but they’ve also raised new issues of investor protection that we still need to attend to.” He is expected to be confirmed during the week of April 12.
The Four Founding Members of the Crypto Council
In addition to Fidelity, the new Crypto Council for Innovation includes Paradigm, a crypto-focused investment firm based in San Francisco which convened the council; Square, a company that provides mobile payment solutions, has invested at least $200 million in Bitcoin and is led by CEO Jack Dorsey, who also is Twitter’s CEO and cofounder; and Coinbase, an online platform for buying, selling, transferring and storing digital currency.
“Strengthening the digital assets ecosystem through research and collaboration has been a focus for Fidelity for many years because we believe that this technology and digital assets will represent a large part of the financial industry’s future,” said a spokesperson for Fidelity Digital Assets, created in 2018 to provide custody and trade execution services for crypto assets owned by institutional investors like hedge funds and family offices.
“Initiatives like the Crypto Council for Innovation allow us to work with other leaders in the ecosystem to create sustainable solutions that advance our industry and enable broader adoption,” added the spokesperson.