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U.S. Senate Takes a Whack at Stablecoins During Today’s Banking Committee Hearing

The U.S. Senate’s Banking, Housing and Urban Affairs Committee is holding a hearing today that will focus on stablecoins and, most likely, the broader cryptocurrency space. The session has been organized by Sen. Sherrod Brown (D-OH), who is Chairman of the banking committee.

Sen. Brown’s hearing – Stablecoins: How do they work, how are they used, and what are their risks? – will be streamed on the senate’s website beginning at 10 am ET. It comes less than a week after the House Committee on Financial Services held its own cryptocurrency hearing last Wednesday.

That nearly 5-hour marathon meeting in the lower house of Congress was very collaborative and productive, however, some experts think the Senate hearing will be much more confrontational. Managing Director and Financial Analyst, Jaret Seiberg, from Cowen Washington Research Group told interviewers on Yahoo! Finance LIVE that there will be fireworks in the Senate chambers.

“It's going to be a lot more contentious. I mean, the House hearing, there were a lot of witnesses. There were a lot of members – it went on for five hours. Senate Banking is going to be much more concise. You have two crypto critics who are testifying. And I expect a lot of punches to be thrown.”

Seiberg further explained that it will ultimately be the Senate that will dictate the timing, type, and tone of crypto legislation that could be passed – not the House of Representatives.

“The House can pass as many crypto-related bills as it wants, but if Sherrod Brown doesn't become a champion of crypto legislation, it's simply not going to become law. And this is our best indicator that we've had in the last 12 months as to what he's going to do.”

As of this writing, there are currently two confirmed witnesses who will testify before Sen. Brown’s Committee, both of whom are vocal crypto critics:

  • Professor Hilary J. Allen, American University Washington College of Law
  • Alexis Goldstein, Director of Financial Policy at the Open Markets Institute 

While stablecoins will be the focus of today’s meeting, stablecoins were originally tackled this midsummer by the President’s Working Group (PWG). However, after three months of decisive inaction, the PWG report didn’t provide any new insights. Instead it repeated past comments that stablecoins have a lot of possible utility for consumers but that utility has to operate under regulatory and legislative guidance. That makes sense, but the big recommendation from the PWG was to punt stablecoins over to Congress and let those lawmakers figure it out. With two banking committee hearings in less than seven days, congressional policymakers seem to be very active about crypto, but not very effective.  

On The Flipside

  • If lawmakers delay decisive action regarding cryptos and stablecoins, the real losers will be retail investors. We stand to lose the most if blockchain technology is slowed or stalled by inaction or hyper-regulation. 
  • Balance and moderation are the crypto keys policymakers need to forge to truly unlock the true potential of this technology.

Why You Should Care?

Blockchain was conceived to help everyday people. It might be a good idea to contact your local members of Congress and tell them where you stand regarding crypto, stablecoins, and blockchain.

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    This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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    Author

    Tor Constantino is a former journalist, consultant and current corporate comms executive with an MBA degree and 25+ years of experience - writing about cryptocurrencies and blockchain since 2017. His writing has appeared across the web on Entrepreneur, Forbes, Fortune, CEOWorld and Yahoo!. Tor's views are his own and do not reflect those of his current employer.