Coinbase Legal Chief Says Private Sector Should Build US Digital Dollar
Coinbase chief legal officer Brian Brooks thinks the private sector is best positioned to build America's digital dollar.
Coinbase’s legal chief is calling for private sector leadership in developing America’s digital currency.
Brian Brooks, in a Fortune essay published Monday, argued private corporations are best positioned to build a much-debated digital U.S. dollar, and that the government should stand back and let them, doing little, if anything, to regulate their underlying blockchains.
“The best path forward is one that harnesses our country’s remarkable capacity for innovation and also reflects government’s historical practice of setting broad guide rails for private innovation within the financial system,” Brooks said. "... But there is no more need for the government to control the blockchain policy of stablecoin issuers than there is for the government to dictate the technology used by privately-owned commercial and investment banks."
Essentially, Brooks envisions an informal public-private partnership in which private corporations leave monetary control to the federal government, and the government, in turn, secedes management of the technological infrastructure to them:
His approach differs from the Facebook-led Libra project, which the social media giant first announced this past summer.
U.S. lawmakers and regulators alike have balked at the company's plans to develop a global stablecoin governed by a Switzerland-based council dubbed the Libra Association, claiming the cryptocurrency would be beyond regulators’ jurisdiction. Further, the project's plans to back the stablecoin with a basket of global currencies could, conceivably, strip America’s federal reserve of monetary control.
In October, Federal Reserve governor Lael Brainard said global digital currency projects like Libra could destabilize the world’s central banks.
Brooks contrasted Libra's approach with USDC (the stablecoin issued by Coinbase and Circle) and other similar tokens, asserting instead that dollar-backed digital currencies pose no threat whatsoever to central bank control. If the Fed-controlled dollar backs the private sector minted stablecoin, then, he pointed out, the fed still controls the stablecoin’s underlying monetary policy.
As Brooks sees it, the government’s best action would be taking little, if any. Other than ensuring that varied stablecoin projects – Libra and Coinbase’s USDC, among others – hold the fiat reserves they claim to, he called for a hands-off approach to private innovation.
Brooks did not immediately respond to requests for additional comment.
Dollars image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.