Crypto OG Erik Voorhees believes DeFi has already solved the regulatory clarity problem for altcoins – Crypto News – Crypto News
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Crypto OG Erik Voorhees believes DeFi has already solved the regulatory clarity problem for altcoins Crypto OG Erik Voorhees believes DeFi has already solved the regulatory clarity problem for altcoins

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Crypto OG Erik Voorhees believes DeFi has already solved the regulatory clarity problem for altcoins – Crypto News

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3 years ago

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Upland: Berlin Is Here!

Shapeshift founder and long-time Bitcoin advocate Erik Voorhees believes that decentralized finance (DeFi) has already solved the issue of regulatory clarity barring people from possessing or trading a majority of cryptocurrencies.

The crypto industry is concerned that all cryptocurrencies besides the four listed on the newly launched EDX Markets — BTC, ETH LTC, and BCH — could potentially be barred from trading in the US

The industry is worried that EDX’s listing is an echo of regulatory sentiment and a precursor of delineation between these four and all other cryptocurrencies in terms of the latter being securities.

Bitcoin, Ethereum, Litecoin, and Bitcoin Cash are the only four cryptocurrencies that regulators have publicly admitted are not securities. Meanwhile, SEC chair Gary Gensler has repeatedly stated that all other cryptocurrencies are considered securities by the regulator for all intents and purposes.

EDX is backed by legacy financial giants like Citadel Securities, which has further stoked fears that Americans will only be able to trade these four cryptocurrencies on exchanges that Wall Street controls due to regulatory restrictions.

The four tokens listed on the exchange have seen massive interest in the ensuing days, with BCH and Litecoin posting impressive gains,

DeFi is the solution

Many have urged the industry to come together and make a concerted effort to ensure that altcoins are not left behind in the US.

However, Voorhees said this is a problem that already has a solution in the form of DeFi.

Voorhees said DeFi is inherently “permissionless” which means if people want to trade and own altcoins that are not listed on centralized exchanges they can turn to decentralized protocols.

DeFi protocols do not need regulatory clarity or permission to operate and there is very little governments can do to interfere aside from making DeFi-related transactions illegal.

According to Voorhees:

“They [governments] can write whatever laws they want. The protocols keep working regardless… That is immensely powerful.”

Bitcoin on-off ramp

One of the main shortcomings of DeFi protocols is the lack of a fiat on-off ramp with traditional banks, which means that altcoins without a fiat connection cannot be used in everyday transactions like buying groceries.

Most people get around this issue by utilizing centralized exchanges which have such on-off ramps or a peer-to-peer market where supported cryptocurrencies can be exchanged.

Compared to DeFi, the listings are limited on centralized exchanges like Coinbase, and even Binance. The crypto industry is worried that these choices could be further limited to just four cryptocurrencies.

However, Voorhees believes this would not be an issue and would not hinder DeFi protocols or altcoins. He said that the industry only needs a “single ramp to banking” to function and this could role could easily be fulfilled by Bitcoin.

People already convert unlisted cryptocurrencies to Bitcoin, Ethereum and stablecoins when they intend to cash out to fiat and this practice would be maintained, albeit in a more limited manner, in the US.

Voorhees’ arguments go back to the foundation of why Bitcoin and DeFi were created in the first place — to give people economic freedom of choice.

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