The Emergence Of A New Financial Center
New York is the center of the financial universe. Wall Street is to finance what Silicon Valley is to technology.
Nothing stays the same forever.
We could be embarking upon a change in the financial world order and New York is looking to give the title away.
California recently introduced a bill that would alter how digital assets are viewed. It put to question the existing Litmus Test, called the Howey Test.
Something like this could change the landscape of financial dominance. At least this is the belief of Brain Armstrong, CEO of Coinbase.
New York is already passing onerous rules to protect the present system. California is now looking to throw its hat in the ring as one of the more powerful players.
Armstrong had this to say:
“This would be huge for California if it happens – ensuring the future of finance is built on the west coast.
So many startups are struggling with this right now – the current securities laws are well intentioned, but stifling a lot of innovation right now.”
Under the proposal, assets that do not depend upon third parties will not be considered securities.
“This bill would create an exception from the above definition by providing that a digital asset meeting specified criteria is presumptively not an investment contract within the meaning of a “security.” The bill would allow that presumption to be rebutted upon good cause shown by clear and convincing evidence by the Commissioner of Business Oversight, as specified.”
Many pointed to the fact that a lack of regulatory clarity is putting the United States further behind the rest of the world when it comes to this new technology.
If cryptocurrency is the future, those countries that are aggressive in their adoption will benefit greatly. The United States benefited greatly from the development of the Internet being done in its country.
Many countries, especially the Chinese, vowed not to be caught in the same position with blockchain and cryptocurrency. It does appear the United States is doing its best to maintain the "old" ways while technology is moving in another direction.
The passing of this bill could actually be a step towards national acceptance. While state law means nothing at the federal level, the feds often model what the states are doing, especially one as large as California.