Cryptocurrency CEOs from six blockchain-based firms testified before the House Committee on Financial Services yesterday, and the most surprising outcome was how engaged and civil everyone was.There was virtually no bipartisan bickering or political posturing. The policymakers asked thoughtful questions with meaningful follow-ups while the expert fintech panel of CEOs answered candidly and thoroughly.
Despite its running time of more than four-and-a-half hours — trust me, I watched the whole thing — every speaker praised committee Chairwoman Maxine Waters (D-CA) for organizing such a “productive and helpful” session. Chief executives from Circle, FTX, Paxos, Steller, Coinbase, and Bitfury were all in attendance with the Tether CEO being the only no-show according to Rep. Sherman.
A wide range of topics were covered including: environmental sustainability; customer protection; regulatory oversight; crypto competition from other countries; risks/benefits of stablecoins; threats to the dollar’s status as global reserve currency; ransomware; security; transaction trackability; criminal use of cryptocurrencies, and more.
Another key area of discussion that came up at different times was what pieces of legislation Congress should consider regarding stablecoins.
"Clarity on disclosure and reporting requirements, and on the reserve and liquidity requirements -- having that be a focused set of statutes -- could be extremely valuable to providing confidence to the market, providing confidence to market participants, and allowing dollar-digital currencies to flourish on the internet,"
said Jeremy Allaire, CEO of Circle.
"I think it's crucial for us to set a clear regulatory plan in place that creates parity across all these different products. I think it's really simple if you have a primary regulator, if you have clear reserves, you make sure to back them by cash or cash equivalent that creates a level playing field for all dollar-backed stablecoins and then they'll really be stable,"
said Chad Cascarilla, CEO of Paxos.
While next steps are unclear, Rep.Sherman said in passing that another round of hearings were being scheduled that will target “academicians and others” who’ll be less favorable to cryptos. It’s worth noting that while several committee members expressed concerns and skepticism about the benefits of cryptos — largely because they admittedly didn’t understand the tech — the only real crypto curmudgeon of the hearing was Rep. Sherman.
"The advocates of crypto represent the powers in our society. The powers in our society on Wall Street and in Washington have spent millions, and are trying to make billions or trillions in the crypto world."
On The Flipside
- House Committee Financial Services Chair, Maxine Waters (D-CA), ran a very successful hearing that was praised by all participants of the four-hour-plus political huddle covering cryptocurrencies’ pros and cons.
- The six-member expert panel of crypto CEOs had a good showing, handling all questions deftly and confidently.
Why You Should Care?
Congress is still in discovery mode, and the next steps are unclear. However, the vast majority of Democrats and Republicans recognized the need for mutual understanding regarding the pros and cons of cryptocurrencies. Wednesday’s hearing was a solid first step forward.