The CEOs of six cryptocurrency companies appeared on Capitol Hill Wednesday, taking questions about the crypto industry from the House Financial Services Committee. Committee chair Rep. Maxine Waters (D-CA) said the hearing will allow Congress to determine the next steps when it comes to regulating the industry.
“Currently, cryptocurrency markets have no overarching or centralized regulatory framework, leaving investments in the digital aspect space vulnerable to fraud, manipulation and abuse,” Rep. Waters said at the hearing. “Several questions remain as to how traditional rules apply, and whether regulators have sufficient authority to protect investors and consumers while maintaining market integrity and encouraging innovation.”
Meanwhile, the crypto CEOs came with a warning for the House committee. While they indicated in prepared testimony that they generally support clearer rules, they also emphasized that overly restrictive ones would not stifle the activity, but merely push it away from U.S. reach.
“Without tailored legislative solutions that are openly debated with public participation, the United States risks unnecessarily onerous and chilling laws and regulations,” Coinbase CEO Alesia Haas said in her testimony. “This could effectively push crypto activity underground or to offshore exchanges that have little or no compliance programs.”
The crypto CEOs’ warning appeared to work on the top Republican on the House committee, Rep. Patrick McHenry (R-NC). “I further ask this question, though, how do we make sure as American policymakers that this cryptocurrency revolution, this technology revolution happens in the U.S. and not overseas,” Rep. McHenry asked the committee at the hearing. “Congress should not be dumb enough to raise a web, a red flag around this technology revolution. We should embrace it. We should understand it. And we should be the international leaders in this space.”
Wednesday’s House committee hearing with the crypto CEOs focused on stablecoins, or cryptocurrencies that are tied to dollar value. According to the committee, the market value of the digital asset ecosystem expanded significantly from approximately $500 billion in 2020 to almost $3 trillion as of last month. In addition, the market capitalization of stablecoins hit almost $147 billion last month. That’s a 500 percent increase from the same time last year.
On the Senate side, Sen. Sherrod Brown (D-OH) has called a hearing on stablecoins for next week.
