Crypto executives make case at Capitol
NEW YORK – Cryptocurrency executives went to Capitol Hill on Wednesday to say their fast-growing industry understands more regulation is likely coming, but they don’t want it to squelch the next wave of the internet or send it offshore to other countries.
Leaders from major crypto exchanges, mining and other related businesses testified for 41⁄2 hours before the House Financial Services Committee, which wanted to learn more about how the industry works as it wrangles with how to regulate it. Much of the discussion centered on protections for investors in a burgeoning ecosystem that critics have called the “Wild West.”
Questions from Congressional members ranged from 101-level discourses about what “stablecoins” are – they’re digital coins pegged to the U.S. dollar or something similar to hold a stable value – to the technical and arcane.
Many questions focused on how stablecoins could help the U.S. dollar hold on to its status as the world’s most important currency, as well as on how digital assets could help the millions of Americans without bank accounts or at the fringes of the financial system.
How to regulate digital assets has been a thorny issue, with companies operating under a patchwork of state and federal oversight.
There’s still disagreement about whether the Securities and Exchange Commission or other regulatory agencies should monitor certain areas of the market, or whether a new regulatory body is needed.
“Currently, cryptocurrency markets have no overarching or centralized regulatory framework, leaving investments in the digital asset space vulnerable to fraud, manipulation and abuse,” said California Democratic Rep. Maxine Waters, chairwoman of the committee.
Many Republicans on the committee, meanwhile, pushed for a light touch on regulation.
Tennessee Rep. John Rose, for example, asked industry executives how Congress could prevent innovation from leaving the United States and happening offshore.
“I’m optimistic that on the regulatory side, we’re not that far from that point,” said Sam Bankman-fried, CEO of trading exchange FTX. “I think there are a few clarifications that could go a very long way here.”
He cited having a single, unified regulatory framework for the trading of actual cryptocurrencies and the futures contracts related to them, as well as having audit requirements for the reserves of stablecoins.