The Columbus Dispatch

Crypto executives make case at Capitol

- Stan Choe

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 offshore to other countries.

Leaders from major crypto exchanges, mining and other related businesses testified 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 financial 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 offshore.

“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 clarifications that could go a very long way here.”

He cited having a single, unified 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.

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