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January 25th, 2023
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US House Committee on Financial Services Provides Insight into Regulatory Needs of Crypto Industry
Crowdfund Insider | | De 8, 2021
Earlier today (December 8, 2021), the House Financial Services Committee held a hearing on digital assets. As was previously reported, the witnesses included top crypto executives and thus provided the opportunity for a unique discussion between House members and crypto entrepreneurs.
Chairwoman of the Committee, Representative Maxine Waters started her questioning with a critical question about Facebook/Meta and its Novi wallet, asking Paxos CEO Charles Cascarilla how Meta’s attempt to create a digital currency will not challenge the US dollar. Paxos said that Meta came to them because they have the most regulated product referencing its dollar-based stablecoin. Cascarilla noted that the pilot was quite limited in size (US and Guatemala) and suggested a discussion with Novi would reveal more information as to the company’s intent to expand the digital wallet.
See: 9 digital assets powering the DeFi revolution?
Ranking Republican Patrick McHenry used his time to focus on the need to enable Fintech innovation in the US instead of chasing crypto startups to other, more welcoming jurisdictions. “Policymakers need to understand the nature of Web 3,” said McHenry. Bitfury Group CEO Brian Brooks explained that Web 3 enables users the ability to own the network, and this is what crypto assets represent.
Regarding prepared remarks, Alesia Jeanne Haas, CEO of Coinbase Inc., and CFO, Coinbase Global Inc, said that crypto is opening up a new financial system. “[The] foundational benefit of crypto is that it allows for innovation of new financial and non-financial applications, like non-fungible art tokens (NFTs), that are controlled by the individual.”
Sam Bankman-Fried, co-founder and CEO of FTX, one of the top crypto exchanges in the world, shared that FTX is designed to empower the individual investor and consumer:
“…because we offer products that are easily accessible and inexpensive, so investors and consumers can make simplified choices to achieve their economic goals. Easy access to financial products all in one place, in many cases on a mobile phone, without multiple gatekeepers assessing rents and posing risks to the investor along the way, is how the digital asset ecosystem is impacting the real everyday lives of those involved, and helping them achieve economic security along the journey.”
He said that a supportive and accommodating policy environment will “only empower the individual investor even further.” Bankman-Fried added that he fully supports a regulatory framework that protects investors and ensures an orderly market to “maintain US leadership.”
See: Industry warns Congress the U.S. risks ‘chilling’ regulations on crypto
For most of the hearing, many members were supportive of digital assets in general, with many advocating for clear-cut rules that do not exist today.
The platforms shared how they currently adhere to strict AML/KYC rules while working closely with authorities to uncover or halt any nefarious activity. Blockchain is a public ledger making it easy to trace transactions that may be illicit in nature – unlike cash.
Brooks said that the US needs to compete on features and utility, globally.
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