Today, fans of crypto have an action-packed hearing to digest, as major executives from companies like Coinbase (NASDAQ:COIN), Paxos, Circle and FTX testify in front of lawmakers to advocate for more clarity in crypto regulations. The hearing, which started at 10 a.m. Eastern, marks the first time in history that a group of crypto chief executives testifies in front of Congress.
Democratic Rep. Maxine Walters, an advocate for cryptocurrency regulations, is leading the hearing. Unsurprisingly, she raised concerns about the lack of regulations during the hearing:
“Currently, cryptocurrency markets have no overarching or centralized regulatory framework, leaving investments in the digital-asset space vulnerable to fraud, manipulation and abuse.”
Crypto execs are obviously in favor of looser regulations, and they are finding more allies among Republicans than Democrats. Republican Rep. Patrick McHenry warned that excessive regulation of crypto could result in brain drain, pushing technological innovations — and innovators — to other countries. He also warned lawmakers of “knee-jerk reactions” to new innovations that could “stifle American ingenuity and put us at a competitive disadvantage.”
With that said, let’s jump into the details of the historic hearing.
Crypto Congress Hearing: What to Know
- The official title for the hearing is “Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States.”
- The House Committee on Financial Services is using the hearing to discuss four topics related to crypto: exchanges, stablecoin offerings, regulatory concerns and federal regulatory responses.
- Paxos CEO Chad Cascarilla mentioned several benefits that crypto provides in a written statement before the hearing. He wrote “A blockchain-based financial architecture could settle trades on the same day, mitigate counter-party risk and eliminate the costly central clearinghouse. This would enable market participants and regulators to monitor and correct settlement and margin shortfalls in real time. We agree that shortening the trade settlement cycle should be a high priority for the SEC, and we are working aggressively to make that possible.”
- Additionally, Coinbase CFO Alisia Haas argued that cryptocurrencies don’t fit within the existing structure of U.S. financial policies and that new laws should be made that are tailored to cryptocurrency.
- Circle CEO Jeremy Allaire analogized that the U.S. dollar is to postal mail what crypto is to emails. This analogy implies that the speed and settlement time of cryptocurrency is much greater than if a transaction was made with dollars.
- On the other hand, U.S. lawmakers are most worried about the threats that cryptos pose, such as fraudulent transactions and scams, excessive energy consumption from mining, tax evasion, and money laundering.
- The court hearing is still ongoing at the time of writing.
On the date of publication, Eddie Pan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.