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Cryptocurrency leaders also warned lawmakers that too strict regulations would push the asset abroad.
Coinbase and Circle, the chief executives of six major cryptocurrency companies, on Wednesday called on the U.S. Congress to provide clearer rules for a $ 3 trillion growing industry, but warned that the harsh cuts would push it overseas.
This is the first time that industry leaders have explained their business to U.S. lawmakers at the House of Representatives’ House of Representatives.
Crypto executives have repeatedly called for careful and personalized rules, rather than forcing them to comply with current industry regulations.
“Without a tailor-made legislative solution that is openly debated with public participation, the United States is jeopardizing unnecessary, harsh and cold laws and regulations,” warned Alesia Haas, CEO of Coinbase Inc.
Congress is unlikely to make new cryptographic rules soon, analysts say, and was mostly treated by lawmakers as an exercise in finding facts.
Democratic Rep. Maxine Waters, a chairman of the committee, said there were questions about proper oversight and highlighted Facebook Inc’s stable currency plans as a major concern due to the company’s widespread presence worldwide.
Some lawmakers, especially Republicans, praised executives for moving forward on what could have been a key technology.
“I’m really impressed. I see a lot of ingenuity, a lot of entrepreneurial spirit, ”said Pete Sessions, a Texas Republican representative. “We need your help.”
Circle CEO Jeremy Allaire, Sam Bankman-Fried FTX Trading Director, Chad Cascarilla Paxos Director, Denelle Dixon Stellar Development Foundation Director and Brian Brooks Bitfury Chief also testified.
Digital assets
The rapid growth of cryptocurrencies and especially stable currencies (digital assets linked to traditional currencies) has attracted the attention of regulators, and they fear that they could jeopardize the financial system if not properly controlled.
Some policy makers, such as Senator Elizabeth Warren and Chair of the Securities and Exchange Commission Gary Gensler, are concerned that the products may be used for illegal purposes or to benefit unsuspecting consumers.
In November, a working group led by the U.S. Treasury recommended that Congress pass a law stipulating that only companies with insured deposits should be issued, such as banks.
Executives said they would welcome regulatory clarity, which could help expand the industry, but too restrictive rules could be counterproductive.
The rapid growth of the sector underscores the strong enthusiasm of digital asset investors and should be helped with clear rules rather than drowning, they said.
Bitfury’s Brooks, Binance’s former chief executive of the U.S. business and formerly a bank regulator, told lawmakers that cryptocurrencies are similar to traditional assets.
“We’re the last country that didn’t invent that,” he said.
But the complexity and volatility of cryptocurrencies — and the changing standards of disclosure, reservations, consumer protection, and other policies — left some lawmakers concerned.
“Most of the people I know have invested in cryptocurrencies [have done so] … Because they think they can get rich quick, ”said representative Juan Vargas. “We’ve seen that before, unfortunately, and it led to a financial crisis.”
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