Six chief executives of some of the major crypto companies were summoned to testify before the House Financial Services Committee, called by the California Democrat Maxine Waters, to discuss and hopefully understand better fast-growing digital assets and go through ideas on how to regulate them.
The Issues on the Table
The California Democrat, Maxine Waters, who was at the forefront of the Committee, expressed concerns about how quickly crypto was growing and being adopted, sharing that celebrity endorsements greatly contributed towards the growth. She emphasized the crypto risks since, at the federal level, crypto had no overarching regulatory framework. Republicans, on the other hand, argued that strict regulation would drive the industry away from the States.
Representative Patrick T. McHenry was worried they didn't know enough about crypto in order to write new rules. And Alexandria Ocasio-Cortes beg the question of whether with crypto they were not building a new financial system but expanding the old one.
Jeremy Allaire, the chief executive at Circle, answered, saying that he truly believed a new global economic infrastructure layer was being built here, integrated with the traditional financial system. Brian Brooks, the chief executive at Bitfury, suggested crypto systems could offer an internet that puts ownership in the hands of users instead of big tech companies.
What Were the Proposed Solutions?
The chief executive of FTX, Sam Bankman-Fried, suggested a unified joint regime for agencies like the Commodity Futures Trading Commission and Securities and Exchange Commission. On the other hand, the chief executive of Coinbase, Alesia Haas, argued that a new regulator was not necessary, as long as more regulatory clarity existed on crypto's status. But all executives agreed that what Gary Gensler, the chairmen of S.E.C suggested, for crypto tokens to be registered as securities, was not the right step, as it would require extra compliance costs and disclosure.
And while the Republican of Ohio, Representative Warren Davidson, called for new, clear rules, the former director of trading and markets at the S.E.C, Brett Redfearn, urged Congress to act as expeditiously as possible.
What would happen, remains to be seen, especially because a new hearing on stablecoins was called by the Democratic chairmen of the Senate Banking Committee, Senator Sherrod Brown, next week. He was vocal that he wanted responsible innovation, and that meant rules.
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