Crypto CEOs Call on Congress to Provide Regulatory Clarity at Hearing on Digital Assets
“We don’t need knee-jerk reactions from legislators to regulate out of fear of the unknown rather than seeking understanding,” said Representative Patrick McHenry.
The House Financial Services Committee heard from several CEOs of major crypto companies in the United States, some of whom appeared to present a united front in urging lawmakers to provide a clear regulatory framework for crypto.
Speaking to an audience this Wednesday titled “Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in America,” Jeremy Allaire, Circle CEO Sam Bankman-Fried, FTX CEO Brian Brooks, Bitfury CEO, Chad Cascarilla, Paxos CEO, Stellar Development Foundation CEO Denelle Dixon, and Alesia Haas, Coinbase CFO and CEO of its US subsidiary, told lawmakers Americans on the challenges their companies face as stablecoin issuers and digital asset exchanges.
In a written statement issued before the hearing, Allaire said Circle supported Congressional efforts for “national licensing and federal oversight” of stablecoin issuers, given that many were now “too big to ignore.” Cascarilla seemed to echo this sentiment, describing the US financial system as “inadequate” to handle the emerging digital economy, but blockchain technology may offer a possible solution:
“A blockchain-based financial architecture could settle trades the same day, mitigate counterparty risk, and eliminate the costly central clearinghouse,” said the Paxos CEO. “This would allow market participants and regulators to monitor and correct settlement and margin deficits in real time. We agree that shortening the settlement cycle should be a high priority for the SEC, and we are working aggressively to make it possible. “
Brooks added that there were already examples of companies involved in the digital asset space that found a more regulatory-friendly environment in other countries, such as Fidelity launching a Bitcoin (BTC) exchange-traded fund in Canada in the absence of the Stock Market and US Securities pending Commission approval.
“There is a reason crypto talent is no longer concentrated in Silicon Valley, the birthplace of the original commercial internet,” Brooks said. Sure, some talents have simply moved from Silicon Valley to Miami, but a surprising number of talented founders have gone to Portugal, Dubai, Abu Dhabi, Singapore and other jurisdictions that are not deregulated at all but have a more positive stance. towards innovation and growth ”.
Addressing the panel of crypto CEOs, Representative Patrick McHenry argued that technology in the crypto space was “already regulated” but acknowledged that any existing framework could be “clunky” and “out of date.” According to the North Carolina congressman, the lack of understanding among his fellow committee members could run the risk of overregulating cryptocurrencies and blockchain:
“We need reasonable traffic rules, we know that. We do not need knee-jerk reactions from legislators to regulate out of fear of the unknown rather than seeking understanding. And that fear of the unknown in the move to regulate before understanding will only stifle American ingenuity and put us at a competitive disadvantage. “
Still ongoing or in development at press time, the House committee hearing seeks to discuss four key aspects of the crypto space: exchanges, stablecoin offerings, regulatory concerns on digital assets, and federal regulatory responses. Lawmakers will likely discuss decentralized finance as well, given its potential to “replicate and replace conventional delivery of financial services such as loans, asset trading, insurance, and other services.”
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