U.S. Regulatory Approach Pushing Crypto Overseas, New 21Shares Report Says
The push by U.S. lawmakers for stringent regulations in the crypto industry is driving business overseas, a 2024 market outlook report released on January 28 from ETP provider 21Shares revealed.
The U.S. Desperately Needs Regulatory Clarity
21Shares’ State of Crypto report claims regularity unclarity has “resulted in offshore exchanges retaining the majority of spot and futures trading volume in recent years.”
The report cited criticism of the United State’s crypto regulatory approach previously made by Coinbase chief legal officer Paul Grewal, who described the country’s strategy as an “enforcement-only approach that has only increased consumer risk and driven customers and innovation out of the country.”
Grewal’s take echoes a similar statement made earlier this year by Coinbase CEO Brian Armstrong at an Innovate Finance conference.
“This is the reason why we need clarity about legislation and regulation onshore because if the UK doesn’t have this, if the U.S. doesn’t have this, these firms are going to be built in offshore havens,” Armstrong said.
We are excited to announce the release of the 11th edition of the State of Crypto magazine! This edition provides an in-depth look at the market outlook for 2024, a pivotal year for Bitcoin with the anticipated halving event. With Bitcoin fundamentals stronger than ever and the… pic.twitter.com/4YKOdMJMmn
— 21Shares (@21Shares) February 1, 2024
Crypto Competition Arises in Light of the U.S. Regulatory Approach
Due to the U.S. exit of Coinbase’s competitor, Binance, the report estimates that the cryptocurrency exchange platform “may gain further legitimacy in the U.S. and consolidate as the leading exchange despite having an active lawsuit with the Securities and Exchange Commission (SEC).”
“We are seeing increasing jurisdictional competition in the global race for crypto talent, with the U.K. and Hong Kong as primary examples,” 21Shares’ report reads. “The main question going into 2024 is if regulators in the largest market in the world, the U.S., will finally provide the regulatory clarity entrepreneurs and consumers desperately need.”
Most recent estimates from Blockchain data analysis firm Chainalysis rank the North American crypto market as the largest globally, with $1.2 trillion in on-chain value—most of which comes from the United States.
The U.K. May Become a Crypto Epicenter
Despite the size of the U.S. crypto market, the 21Shares’ 2024 market outlook report suggests the United Kingdom may take its place as a leading crypto hub, noting that the “U.K. may be able to meaningfully attract crypto businesses in 2024.”
The report cites statements made by Andrew Griffith, former economic secretary to the Treasury, who promised in November 2023 that “the government’s ambition to make the U.K. a global hub for cryptoasset technologies remains steadfast.”
So far, several crypto firms are already operating within the U.K., including Kraken, BitStamp, Gemini, and more.
The post U.S. Regulatory Approach Pushing Crypto Overseas, New 21Shares Report Says appeared first on Cryptonews.