YAP Cast

YAP Cast S3E3: “Money and Regulation” With Nikhilesh De

Welcome back to YAP Cast! In the third episode of Season 3, Samantha Yap interviews Nikhilesh De, Managing Editor for global policy and regulation at CoinDesk. He has been covering the world of crypto since 2017, so he’s seen the ups and downs of the industry.

In this episode, we’ll shed light on the goals of financial regulation and how they differ when it comes to regulating crypto.

From Intern to Managing Editor: Nik’s Crypto Journey

Interning at CoinDesk in 2017, Nik was drawn to the industry’s potential for challenging the status quo. Over time, he witnessed the crypto industry’s evolution from a niche interest to a global phenomenon.

Having worked his way up to Managing Editor for Global Policy and Regulation at CoinDesk, Nik is a passionate advocate for responsible development in the cryptocurrency industry. He believes cryptocurrencies have the power to revolutionize our understanding of money and emphasizes the need for regulations that protect consumers and investors.

Nik eagerly anticipates how the crypto industry will continue to evolve, recognizing its potential to bring positive change to the world.

Regulating Money: Concerns and Considerations in Crypto

Nik acknowledges that regulators express concerns about potential harmful uses of money, such as weapons proliferation and funding illicit activities. He notes that finding the right balance between restrictions and transactional freedom is a crucial challenge for regulators, highlighting the example of North Korea’s alleged use of crypto funding to support its nuclear weapons and ballistic missile programs.

This segment underscores the importance of balancing regulation and innovation as the crypto industry matures. While different viewpoints exist within the crypto community, efforts are underway to address concerns and develop appropriate regulations. The ultimate impact of these endeavours remains uncertain.

The Complex and Nuanced Goals of Financial Regulation in the Crypto Industry

Samantha questions whether regulations truly benefit the intended recipients or serve other interests. Nik acknowledges the complexity of the issue, with regulators holding diverse and sometimes contradictory viewpoints. A consensus among regulators is necessary for implementing regulations, yet a lack thereof has hindered clear crypto regulation, particularly in the United States.

Regulators commonly aim for stability, consumer protection, and the prevention of market manipulation. However, perspectives within the crypto community may differ. Nik acknowledges that regulators’ goals can vary in their success in creating a fair and equitable system.

When considering who truly benefits from regulation, Nik emphasizes the nuanced nature of the topic. He cites the example of a banking industry bailout, which protected both everyday people and wealthy individuals. Crypto regulation, too, requires recognition of its complexity and nuance “and we should probably be more willing to accept that nuance,” says Nik.

The Need for Genuine Engagement Between the Crypto Community and Regulators

Effective communication channels and platforms are crucial for meaningful engagement between the crypto community and regulators. Nik highlights the limitations of social media platforms like Twitter. He emphasizes the importance of identifying appropriate channels for constructive conversation, such as industry conferences, regulatory hearings, and workshops. Alternatively, direct outreach through formal channels can also be effective, as regulators do not typically give significant weight to Twitter discussions.

Nik also raises concerns about the noise and polarization on social media, particularly on Twitter, stating, “Twitter isn’t real life… Part of that is: where do you engage with the regulators? Where do you actually do that? Is that going to be a good-faith engagement?… Finding a place where you can have that kind of conversation is important.”

Samantha acknowledges the role of media outlets like CoinDesk and Reuters in facilitating genuine engagement between the crypto community and regulators. Through accurate information and analysis, journalists like Nik contribute to understanding and shaping informed discussions beyond social media.

Engagement between Crypto Leaders and Regulators

Ongoing engagement between crypto leaders and regulators is happening globally. Crypto CEOs and leaders actively participate in discussions with regulatory bodies, meeting with congressional leaders in Washington D.C. and European Parliament representatives in Brussels.

Regulators are still navigating the effective regulation of cryptocurrencies and related technologies, adding complexity to the process. Continuous engagement and dialogue between crypto leaders and regulators are crucial to address emerging issues, align regulatory frameworks, and ensure responsible growth in the crypto ecosystem.

Regulating Crypto: Is it Money?

Different regulators hold varying views on whether cryptocurrencies constitute money. Applying traditional definitions of money to cryptocurrencies like Bitcoin and Ethereum poses a challenge. Samantha cites Ethereum’s Ether tokens, often seen as utility tokens rather than a medium of exchange, as an example.

The segment concludes with a discussion on whether cryptocurrencies should be classified as securities. Regulators question whether Ether is a security, and lawsuits involving insider trading have raised similar claims. Rather than solely focusing on whether a crypto asset is money, Nik suggests regulators should consider whether crypto assets fit into existing regulatory categories.

Follow Nikhilesh De on Twitter here