Welcome to The Ask, where each week Crypto Investor interviews essential voices doing the work to make crypto 'mainstream.' Exchange lightly edited.

This week we spoke to Craig Salm, vice president of legal at Grayscale Investments. He’s also co-chair of D.C. lobbyist Blockchain Association’s securities law working group, a founding member of the Crypto Rating Council and a board member at ETC Cooperative, an Ethereum Classic consortium. You can find Salm on Twitter @CraigSalm.

How do you think the news about El Salvador adopting Bitcoin as legal tender is going to change the conversation in the U.S., particularly around securities law?

The fact that we’re looking at an entire country explore Bitcoin, I think, just makes perfect sense. And El Salvador is ... the first domino. And I think it makes sense that there probably will be more.

On the one hand, you’ll probably have countries - first-world countries - that are more comfortable with their financial system and don’t really see a need for Bitcoin. I think the U.S. is an example of that. [Those countries] can sort of sit back and see what happens. Then, I think other countries will want to take this back because they see the benefits of decentralized digital currency like Bitcoin and definitely want to get involved too and see what it can do.

You have a hypothesis that regulation for cryptocurrencies, in the U.S., would ultimately be good for the industry. Tell us a little bit about that. There’s likely to be some shakeout and not all companies will survive a transition to being more strictly regulated.

Our position at Grayscale is that regulation is what differentiates us as a business, compared to a lot of other businesses in this industry. We are the first to create investment vehicles that became SEC reporting companies in the U.S. – our Grayscale Bitcoin Trust, our Grayscale Ethereum Trust. 

We have another one that was just registered, our Grayscale Digital Large Cap Fund, that’s now publicly filed. And the reason we did that is because we think it’s important to bring regulatory clarity to investors in the U.S. That’s what really gives them confidence that this is as legitimate as any other asset class that investors are familiar with. It’s important that investors have that sort of protection and competence that comes with more regulatory clarity, and so that’s definitely a part of our business model and why we think it’s really important.

You’re involved with a lot of groups that interact with regulators - Blockchain Association, ETC Cooperative and the Crypto Ratings Council. Which regulator do you think will act first on issuing more guidance or clarity on crypto assets?

Well, yeah, the U.S. is interesting in terms of financial regulators because rather than having one singular regulator that covers everything, we have it split off depending on what the particular asset is. SEC regulates securities, CFTC has commodities and so on. And I think it’s important to realize that all of these regulators - the CFTC, FinCEN, IRS - have all come out over the last few years with progressive, gradual guidance that comes up depending on what the particular assets are. 

And so, what we often hear [from investors] is that regulatory clarity doesn’t exist and that’s why [they] ended up staying away. But I think we’re of the view that there actually has been quite a good amount of regulatory clarity over the last few years and that it really shouldn’t keep investors away from the asset class, but that’s their own issue.

Welcome to The Ask, where each week Crypto Investor interviews essential voices doing the work to make crypto 'mainstream.' Exchange lightly edited.

This week we spoke to Craig Salm, vice president of legal at Grayscale Investments. He’s also co-chair of D.C. lobbyist Blockchain Association’s securities law working group, a founding member of the Crypto Rating Council and a board member at ETC Cooperative, an Ethereum Classic consortium. You can find Salm on Twitter @CraigSalm.

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