The founder of decentralised exchange dYdX, Antonio Juliano, recently stated that crypto developers should abandon their focus on serving customers in the U.S., at least for the next five to ten years. According to Juliano, the convoluted U.S. regulatory environment poses significant challenges that can hinder the scalability of start-up projects. His line of thinking advises that crypto creatives should explore other overseas markets that provide a friendlier regulatory climate, nurture their innovations there and return to the U.S. when the regulatory landscape becomes more favourable.
While this view might hold water, it bares ignoring that new developments are often fraught with difficulties. What Juliano doesn’t hold in light is the opportunity that problem-solving presents to new projects—in this case deciphering a complex legal framework—which can create a competitive advantage that hampers late entrants from the market.
In connection to his views, there’s a general industry perception that the U.S. lacks definitive rules and regulations revolving around digital assets. Consequently, a confusing overlap between the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission’s judicial oversight exists. This quintessential conundrum creates a condition of uncertainty that arguably hampers technological innovation and user adoption, however, it also provides a controlled environment to guard against deceptive and manipulative malpractices.
Juliano’s logic is to grow the crypto sector overseas so that it gains enough strength to influence the U.S. policymaking positively. He suggests that crypto developers should focus on finding product-market fit (PMF) overseas and only loop back towards the U.S. when they have large user bases to leverage. However, the alternative belief is that even in the face of current questionable regulatory climate, pioneers can seek clarity from the regulatory bodies in order to secure a safe and legal operating environment in the U.S. Indeed, this is the outlook of Brain Armstrong, the CEO of Coinbase.
As perspectives diverge, the truth remains that the path to regulatory clarity is vital for the long-term survival of the crypto industry in the U.S. The present state of affairs may not completely favour crypto projects’ growth, and as such foreign expansion may be a logical alternative for some. However, the U.S. market is a key battleground that cannot be abandoned entirely. The future may just hold the right climate for the crypto sector to thrive in the U.S, and those sustainable projects that maintain their presence may end up reaping the benefits. As in all facets of life, only time can truly reveal where exactly the pendulum will swing.