NEW YORK (AP) – Cryptocurrency executives took to Capitol Hill on Wednesday to say their fast-growing industry understands more regulations are likely to come, but they don’t want it to stifle the next wave of Internet or sends it abroad to other countries.
Executives from major crypto exchanges, mining and other related businesses testified for four and a half hours before the House of Representatives Financial Services Committee, which wanted to learn more about how the industry works. as she struggles with how to regulate her. Much of the discussion has revolved around protecting investors in a burgeoning ecosystem that critics have called the “Wild West.”
Questions from members of Congress ranged from 101-level speeches about what “stablecoins” are – they’re digital coins pegged to the US dollar or something similar to keep value stable – to technique and arcane. Many questions focused on how stablecoins could help the U.S. dollar maintain its status as the world’s most important currency, as well as how digital assets could help the millions of Americans without a bank account or on the fringes of the financial system.
How to regulate digital assets has been a thorny question, with companies operating under a patchwork of state and federal oversight. There is still disagreement over whether the Securities and Exchange Commission or other regulators should monitor certain areas of the market or whether an entirely new regulator is needed.
“Currently, cryptocurrency markets do not have a comprehensive or centralized regulatory framework, which makes investments in the digital asset space vulnerable to fraud, manipulation and abuse,” said the Democratic representative. from California, Maxine Waters, chair of the House financial services committee.
Many Republicans on the committee, meanwhile, pushed for a slight touch of regulation. Tennessee Representative John Rose, for example, asked industry executives how Congress can prevent innovation from leaving the United States and happening overseas.
“I am optimistic that on the regulatory side we are not that far from this point,” said Sam Bankman-Fried, CEO of the FTX trading exchange. “I think there are some clarifications that could go a long way here.”
He cited having a single, unified regulatory framework for trading real cryptocurrencies and related futures contracts, as well as auditing requirements for stablecoin reserves, among others.
Alesia Haas, chief financial officer of Coinbase Global, said the US government should create a new regulatory framework for digital assets. “Our existing regulatory system does not work effectively for the open and decentralized networks created by cryptography,” she said in written testimony.
Tensions only increase as the industry grows and more investors flock to the market, either because they believe in the future of crypto or because they are looking to win. money quickly. Cryptocurrencies are collectively valued at nearly $ 2.4 trillion, roughly the same size as Apple, Microsoft, or another of the world’s largest stocks.
“There is something about crypto that scares people,” said Brian Brooks, CEO of Bitfury Group, one of Bitcoin’s early miners, while saying the country did not need to add another regulator to monitor the crypto. “I don’t know what it is, maybe it’s just because it’s new.”
Brooks was previously the acting head of the Office of the Comptroller of the Currency, which regulates the banking industry, when Donald Trump was president.
One of the main criticisms leveled at cryptocurrencies is the amount of electricity they devour. Bitcoin mining alone uses about as much energy in a year as any gold mine in the world, or about as much as Norway or Ukraine, depending on the consumption index. Cambridge Bitcoin electricity. However, only a small portion of Wednesday’s discussion centered on this.
The executives who testified at the hearing were Jeremy Allaire, CEO of stable broadcaster Circle; Bankman-Fried of FTX; Brooks of the Bitfury Group; Charles Cascarilla, CEO of blockchain infrastructure firm Paxos Trust Company; Denelle Dixon, CEO of Stellar Development Foundation, which works in Coinbase Payments and Haas.
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