Saturday, June 25

Executives of 6 Bitcoin companies ask US Congress for clear rules

The CEOs of 6 exchanges and cryptocurrency-related services companies testified this Wednesday in front of a group of representatives of the United States Congress. During the hearing, which lasted for almost 5 hours, the executives asked the parliamentarians for a clear regulation adapted to the sector.

The audience, which took place before the Financial Services Committee, was summoned by Representative Maxine Waters, in order to better understand the challenges and benefits of this financial innovation for her country. According to a review from The New York Times, Congresswoman Waters said she was concerned about the ‘rapid growth’ of cryptocurrency adoption, which, he believes, is driven by celebrity endorsements.

Last May, CriptoNoticias reported that a survey by the investment company NYDIG revealed the adoption of bitcoin (BTC) or some other type of digital asset by at least 46 million Americans. Waters opines that the lack of a “blanket” regulatory framework leaves crypto investors “vulnerable to fraud, manipulation and abuse.”

Coinbase CFO Alesia Haas clarified that the cryptocurrency market behaves differently from traditional assets. Source: Youtube

However, another congressman named Patrick McHenry warned that the regulation of the cryptocurrency industry should not be excessive, as it would run the risk of driving away technological innovation, which would be transferred to other countries, leaving the United States at a disadvantage. In his opinion, “fear of the unknown” should not prevail over understanding, since it would only “stifle American ingenuity.”

It should be noted in the middle of this year, China completely banned all kinds of activities with cryptocurrencies, especially affecting Bitcoin mining, an industry predominantly settled in the Asian country until that time. The decision caused the massive migration of this type of companies to other countries, including The United States, which now concentrates the largest number of Bitcoin miners.

Exchange executives try to educate congressmen on cryptocurrencies

Among those who appeared to give their testimonies were the CEOs of relevant companies in the US ecosystem, such as Circle, FTX, Bitfury, Paxos, Stellar Development Foundation and Coinbase. The executives focused on explaining to the congressmen the advantages of technology, and how adequate regulation is necessary for the characteristics of the sector.

Coinbase CFO Alesia Haas, clarified that the cryptocurrency market is fundamentally different from that of traditional assets, therefore, current regulations do not adapt to this new technology. For his part, the CEO of FTX, Sam Bankman-Fried, said that his company recently proposed to regulators to create a regime on cryptocurrencies that is common for agencies such as the Securities and Exchange Commission (SEC) and the Futures Trading Commission. of Commodities (CFTC).

Sam Bankman-Fried also highlighted unbanked Americans can find access to financial services through cryptocurrencies.

Some experts who offered their analysis on the audience believe that Congress is unlikely to issue special regulations for the cryptocurrency sector anytime soon. Lee Reiners, former head of the Federal Reserve Bank of New York, told TNYT that “there will be no substantial changes to the rules until there is a financial crisis linked to cryptocurrencies.”

Recently, the control and supervision agencies of the US financial system made public a list of tasks related to the regulation of bitcoin and other cryptocurrencies, which will be developed next year. As Criptonoticias reported, 2022 seems to be the year of regulations for this sector, in the United States.

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