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Digital assets will take center stage Wednesday in front of Congress.
The full House Financial Services Committee will meet this morning to discuss cryptocurrencies and stablecoins with Jeremy Allaire, Circle CEO, Sam Bankman-Fried, FTX CEO, Brian Brooks, Bitfury CEO, Charles Cascarilla, CEO from Paxos, Denelle Dixon, CEO of Stellar Development Foundation and Alesia Haas, CEO of Coinbase Inc. (who is also CFO of parent company Coinbase Global).
A hearing note briefly details both the current pending issues that regulators are focusing on, such as stablecoins, as well as what the market looks like today. The authors of the note focus much of their attention on issues of investor protection and market integrity.
“Cryptocurrency markets lack a comprehensive and centralized regulatory framework, making investments in the digital asset space vulnerable to fraud, manipulation and abuse,” the memo reads, but notes. Also that many exchanges and issuers of stablecoins have received money transfer licenses or trusts. charters. , and Paxos in particular has conditional trust status through the Office of the Comptroller of the Currency, a federal banking regulator.
And unlike some of the previous committee hearings, today’s meeting will be a full committee hearing, giving each of the more than 50 members an opportunity to ask questions or clarify any concerns they have at this time.
Starting with the president @RepMaxineWaters. She is a powerful force against banks and protects consumers. Your staff have been very open to discussing these issues and learning more. Although it can be critical, you have been interested in non-financial use cases like NFTs. pic.twitter.com/XYApa14O7Q
– Ron Hammond (@RonwHammond) December 7, 2021
Lawmakers should not debate the merits of a specific legislative proposal to regulate cryptocurrencies during this hearing, although Rep. Warren Davidson (R-Ohio) previously tweeted about his taxonomy law. Tokens, which have been submitted multiple times but have not been voted on. by the House.
However, various reports from regulatory groups and requests from specific regulators can be discussed, such as last month’s report from the President’s Financial Markets Task Force on Regulation of Stable Currencies.
The Token Taxonomy Act has been asking for a hearing since 2018. Ask @RepMaxineWaters and @PatrickMcHenry to point you out for the House Financial Services Pledge hearing on 8/12/21 on ‘Digital Assets and’ Future of finance ‘. #PassTTA
– Warren Davidson (@WarrenDavidson) December 5, 2021
The witness statements largely describe the activities of various crypto officials and provide suggestions on how lawmakers can address regulatory loopholes.
Circle’s Allaire highlighted the current lack of specific regulations on stablecoins in his prepared remarks, a key concern for regulators.
“There is much work to be done to define reserve, liquidity and capital requirements, as well as risk management and operational resilience requirements for issuers of stablecoins globally,” Allaire said in his keynote address.
Brooks, the former acting controller who briefly ran Binance.US prior to his role at BitFury, said that crypto activity is already taking place outside of the regulatory framework, but it makes sense that a legislative proposal would subject those activities to oversight by federal regulators.
He cited stablecoin issuers as an example, asking whether it was “consistent to take the position that only banks should be able to issue stablecoins, but then not grant bank permits to larger coin issuers.”
The Senate Banking Committee will follow a hearing on stablecoins next Tuesday.
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