Congressional committees get mixed messages on cryptocurrency regulation
Two separate Congressional committees Wednesday got mixed messages on cryptocurrencies, hearing the full gamut of opinions ranging from banning them to embracing them with reasonable regulation.
First up in the morning was a hearing of the House Committee on Agriculture on “Cryptocurrencies: Oversight of New Assets in the Digital Age,” with a variety of witnesses including venture capitalists, government officials and other experts.
Headlining the witnesses was Daniel Gorfine, director of the Commodity Futures Trading Commission’s financial technology initiative, who cautioned against too-hasty regulations.
“We all have the shared goal to bring clarity and certainty to the market but [we] also need to be sure that we are thoughtful in our approach and do not steer or impede the development of this area of innovation,” Gorfine was reported as saying. “Indeed, while some may seek the immediate establishment of bright lines, the reality is that hasty regulatory pronouncements are likely to miss the mark, have unintended consequences or fail to capture important nuance regarding the structure of new products or models.”
Gary Gensler, senior lecturer at the MIT Sloan School of Management, told the committee that he encouraged speeding up decisions about sensible regulations in order to keep innovators in the United States.
In the afternoon, it was the turn of the House Financial Services Committee Monetary Policy and Trade Subcommittee. It met to hear testimony examining the extent to which the U.S. government should consider cryptocurrencies as money and their potential effect on domestic and foreign economies.
Leading the witness was Jerome Powell (pictured), head of the Federal Reserve, who raised concerns about cryptocurrencies, telling the committee that “there are investor and consumer protection issues.”
Powell’s testimony was expected, but what came next wasn’t. Mashable reported that Rep. Brad Sherman (D-California) called on cryptocurrencies to be banned.
“We should prohibit U.S. persons from buying or mining cryptocurrencies,” Sherman told the committee. “Mining alone uses electricity which takes away from other needs and-or adds to the carbon footprint. As a store, as a medium of exchange, cryptocurrency accomplishes nothing except facilitating narcotics trafficking, terrorism and tax evasion.”
Guy Hirsch, USA managing director of eToro Group Ltd., told SiliconANGLE that he thought overall that today’s hearings were a good step in the right direction.
“We encourage regulators to hear more from good actors and companies with an international presence since they would be valuable to this discussion in Congress,” Hirsch said. “Cryptocurrencies are by design global assets and companies with global perspective are uniquely positioned to help regulators better understand the diverse regulatory approaches and best practices.”
Any law that Congress will pass affecting cryptocurrencies, he added, will have global impact on foreign companies doing business in the U.S. or want to enter the U.S. market, so it’s important for U.S. lawmakers to facilitate dialogue with other nations.
“Digital assets present unique challenges for regulators because they have properties that don’t apply to our current understanding of securities or commodities,” Hirsch said. “While it makes sense to classify some tokens as securities, others are more accurately classified as currency or commodities, or perhaps a new asset class altogether. Our industry should provide education and support for regulators to define a framework that will lead to logical and growth-oriented classification of each crypto.”
A message from John Furrier, co-founder of SiliconANGLE:
Show your support for our mission by joining our Cube Club and Cube Event Community of experts. Join the community that includes Amazon Web Services and Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger and many more luminaries and experts.
We really want to hear from you, and we’re looking forward to seeing you at the event and in theCUBE Club.