The US Congress Subcommittee on Oversight and Investigations yesterday invited experts in the field of the cryptocurrency market to discuss the regulation of the blockchain-based digital assets industry.

Among them were the director of research at the Coin Center Peter Van Valkenburg and the director of financial policy at the Open Market Institute think tank Alexis Goldstein. Together with members of Congress, they took part in a discussion about the benefits and risks of digital assets, and also discussed the prospects for blockchain. Thanks to this, you can get an idea of ​​how officials generally relate to the cryptocurrency niche.

Note that not all representatives of Congress are wary of cryptocurrencies. For example, his former representative, Ron Paul, said last month that Bitcoin should be legalized as full-fledged money at all, as well as taxed on transactions with it.

Paul’s arguments boil down to the fact that the maximum BTC supply is limited to 21 million coins, and it is impossible to go beyond this limit. At the same time, the official is unhappy with the policy of the US leadership, which has undertaken to actively print money amid the spread of the coronavirus pandemic. More information about the expert’s point of view can be found in a separate article.

In general, several topics were touched upon during the sessions. Here are the key ones.

Crypto Industry Needs Regulation

Congressional Representative Tom Emmer is concerned that America may not fully benefit from business in the crypto environment if innovation is constrained by lack of regulatory clarity. His concerns were shared by other panelists.

Emmer called for the creation of a robust digital asset classification system to determine if cryptocurrencies are securities and commodities, or deserve the same treatment as national currencies. He also highlighted the potential of Bitcoin and blockchain in creating greater transparency and trust in financial relationships.

Tom Emmer USA Congress

Tom Emmer

It sounds like the right idea – it is now much more profitable for the US government to embrace innovation and regulate it clearly in order to benefit from the development of start-ups and new companies in the field of cryptocurrency. Especially considering that China is actively testing the national digital currency, and in the United States, the creation of a digital dollar is predicted in a few years. In this regard, support for cryptocurrency startups will allow the country not to lose the title of an advanced state in terms of adopting innovations.

2008 financial crisis and Bitcoin ban

The rapid innovation and expansion of the crypto industry, coupled with its attractiveness to traders, has raised some concerns in Congress, Decrypt reported. As new firms, platforms, and tools to encourage and support the use of cryptocurrencies emerge at such a rapid pace, some believe a new crisis similar to the one that hit the US in 2008 is likely to come.

It seems that here the legislators have clearly misinterpreted something – that financial crisis was associated with the real estate market and began with it. Innovation did not play a significant role in it. The boom in the cryptosphere from the standpoint of critics can rather be compared to the dot-com bubble that occurred in the stock market from 1995 to 2001. At least this point of view has already been voiced earlier.

At the same time, we believe that the active development and growth of the blockchain and digital assets niche is primarily due to its novelty. If not, it would be strange to see the industry bubble up every few years.

Bitcoin chart trading blockchain

True, even now the Bitcoin chart looks like a “burst” bubble

The representative of the 30th constituency of California, Brad Sherman, suggested introducing radical measures – a complete ban on Bitcoin in the United States. According to him, “even playing the lottery” is much better than investing in the crypto market, as it is “very volatile and supports anarchism in the form of tax evasion.

Note that Brad has been criticizing the digital asset industry for many years, and his position has remained practically unchanged. Sherman regularly states about the use of cryptocurrencies to finance the activities of banned organizations and the impossibility of using BTC to conduct transactions on a daily basis.

Money laundering problem

Representative Anthony Gonzalez highlighted the importance of tackling the financial transactions of criminals in favor of digital assets. He stated that “99 percent of illegal transfers in conventional currencies are ignored,” therefore it is simply illogical to develop regulations on this basis for the crypto market.

This is an argument that has been put forward by many cryptocurrency proponents and even financiers. At the same time, the September 2020 report of the Society for Worldwide Interbank Financial Telecommunications (SWIFT) noted that the number of detected cases of money laundering using cryptocurrencies “remains relatively small compared to the amount of money laundered by traditional methods.

In addition, former CIA chief Michael Morell has already stated that criminals are simply not comfortable using Bitcoin for their activities. Nevertheless, in a transparent blockchain, available to everyone, all transactions of each user of the coins are recorded.

The very fact that crypto is actively talked about in the US Congress is direct evidence of the rapid adoption of digital assets around the world over the past few years. Whatever the government’s attitude to Bitcoin, it has only two options – to go into complete opposition to innovation and miss out on the potential benefits from their development, or to introduce soft regulation of the cryptosphere .

We believe that it would be more logical for officials not to oppose progress and not hinder the popularization of cryptocurrencies. And although the proliferation of decentralized digital assets and platforms will surely affect the powers of the authorities in the future, now the choice in favor of them seems to be the most correct option. Especially considering that some states are already thinking about recognizing BTC as an official means of payment.

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