Cryptocurrency Chiefs Go to Congress for Landmark Hearing
Chief executives of six cryptocurrency companies will testify before the House Financial Services Committee on Wednesday about the use of cryptocurrencies related to promises, risks and the value of fixed assets such as stablecoins or dollars.
It includes Brian Brooks, President Donald J. Trump’s inner circle includes the former executive controller of the currency and now the chief executive of the blockchain technology company Bitfury Group; Sam Bankman-Fried, Head of Crypto Exchange FTX; Alessia Haas, Head of Coinbase Exchange in the United States; And Jeremy Allier, head of the Payment Company Circle.
Stablecoins, the key to trading in volatile crypto markets, has a market capitalization of nearly 7 147 billion as of November, an increase of more than 500 percent over the past 12 months, according to a memo from the committee hearing. But they have so far proved that some issuers are not consistently supporting what they claim, given the current growth rate, raising concerns about running a digital bank that could pose a threat to the wider economy. Financial regulators last month called on Congress to take “immediate action to legislate” addressing these risks.
Wednesday’s hearing, called by the committee’s Democratic chairwoman, Maxine Waters, of California, is part of a crypto “fact-finding mission” that will help members decide what to do next on stablecoins and other cryptocurrency issues, a committee aide said. . He declined to provide a timeline for possible legislative action, but acknowledged that given the concerns and urgency expressed by financial regulators, it could be imminent.
Some of the officers who testified at the hearing will try to convince the committee that they are paying attention to the wrong questions. Mr Brooks said US policymakers were preoccupied with small issues, such as whether to issue banking charters to stablecoin issuers and what cryptocurrency securities might be and are inadequately relevant to global priorities and give investors safe access to the products they want.
Charles Cascarilla, co-founder and chief executive of Stablecoin issuer Poxos, said he was looking forward to discussing with policymakers how cryptocurrencies can be made more efficient and inclusive.
Crypto executives often argue that blockchain technology allows people to bypass traditional intermediaries and move value across the Internet without gatekeepers like banks. He says it will help bring in 1.7 billion people globally who have been left out of the current economic system.
Daniel Dixon, chief executive of blockchain payment network Stellar, said that in order to facilitate alternative banking services for refugees in Africa, he plans to suggest that stablecoins are already being used creatively beyond trading and betting. “It’s the industry’s responsibility to make people comfortable with technology,” she said.
Another hearing on Stablecoins, convened by Ohio Senator Sherrod Brown, is scheduled for next week by the Senate Banking Committee. The list of witnesses has not been finalized.
Mr. Brown, the committee’s Democratic chairman and an outspoken crypto critic, said he was reviewing responses to letters sent to major stablecoin issuers and investors who asked about their operations and relationships, citing increased risks from financial regulators. The inquiry was sent to the cryptocurrency exchanges Coinbase, Gemini and Binance.US, the stablecoin issuing circle, Tether, Paxos and Trust Token, and the joint circle and stablecoin consortium overseeing the Coinbase initiative.
Mr Brown said his hearing next week would be a “step” towards legislation and that it would be chaired by Gary Jensler, chairman of the Securities and Exchange Commission, and Janet L. Treasury, secretary of the Treasury. “Working together” with financial regulators like Yellen.
But the senator doesn’t expect officials or anyone else at Wednesday’s hearing to say more about blockchain or financial inclusion that he hasn’t heard before. Recalling the “financial magician” who promoted mortgage-backed securities and derivatives before the 2008 financial crisis, he asked, “When are we going to learn?”
Mr Brown added: “I want responsible innovation and that means rules.”
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