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| Brian Armstrong |
The CEO of America’s largest crypto exchange, Coinbase, Brian Armstrong, has put forward an ambitious initiative that could radically reshape regulation in the United States. He proposes the creation of special economic zones - “crypto sandboxes” - where conditions for blockchain companies would be significantly more relaxed.
In his concept, Armstrong draws a direct historical parallel with China. In the late 20th century, the modest fishing town of Shenzhen was granted the status of a special economic zone, which within a decade transformed it into a global technology metropolis and the “factory of the world.”
“If we want the crypto industry to thrive in America rather than flee offshore, we need designated jurisdictions with predictable and eased regimes,” Armstrong stated in a series of posts on social network X (formerly Twitter).
According to the executive, such “sandboxes” would serve as landscapes for testing innovations that today exist in the “gray zone” of U.S. federal law.
The idea goes beyond the crypto market alone. Armstrong envisions these territories as experimental hubs for a wide spectrum of services and technologies:
- Stablecoin infrastructure - testing new stablecoin algorithms without the strict banking requirements that apply across the U.S.
- Decentralized finance (DeFi) - enabling lending and trading protocols without intermediaries, where legal responsibility is redistributed through smart contracts.
The Problem of “Brain and Capital Drain”
Armstrong has voiced this concern for years. According to him, the hardline stance of the SEC (U.S. Securities and Exchange Commission) has led many startups to prefer registering in Singapore, the UAE, or Switzerland.
“Every day talented developers leave California and New York because they fear lawsuits. Capital flows to places where it is welcomed,” Armstrong argues.
It is noteworthy that Coinbase is already investing in similar projects abroad, particularly in Prospera, Honduras. This experience, in Armstrong’s view, proves the viability of sandbox-city models.
Opponents of the idea point to risks of money laundering and lack of consumer protection within such zones. Supporters counter that it is better to test risks in designated territories than to strangle the entire industry at its roots.
And then, without a doubt...
Armstrong intends to lobby this initiative at the Congressional level. If “crypto Shenzhens” emerge, the U.S. could regain its status as the world’s “crypto capital” - a status that is fading and gradually dispersing across the globe.