Executives, US Party Politics, and Web3

On December 8, executives from six major cryptocurrency companies confronted the U.S. House of Representatives Financial Services Committee during a special hearing on digital assets. Although the tone of the conversation was largely proclaimed, the industry responded with an optimistic buzz: It looks like cryptocurrencies will be a hot topic in Congress in the years to come.

The meeting, which took place in Congress, also caught the attention of major media outlets. Most notably, this audience marks the first time industry leaders (also known as “crypto moguls”) express the sector’s fears and hopes directly to US lawmakers for $ 2.2 trillion.

Industry representatives called to witness the hearing included Circle CEO Jeremy Allaire; Sam Bankman-Fried, CEO of FTX; Chad Cascarilla, CEO of Paxos; Denelle Dixon, CEO of the Stellar Development Foundation; Brian Brooks, Bitfury CEO; and Alesia Haas, Coinbase’s Chief Financial Officer.

Executives, US Party Politics, and Web3
Executives, US Party Politics, and Web3

Some of the key lawmakers actively involved with the captains of the cryptocurrency industry have been Rep. Pete Sessions, Republican of Texas; Rep Maxine Waters, Democrat of California; Rep. Gregory Meeks, Democrat of New York; Representative Brad Sherman, Democrat of California; Rep. Patrick McHenry, Republican from North Carolina; Rep. Blaine Luetkemeyer, Missouri Republican; and Senator Sherrod Brown, Democrat from Ohio.

So went the big day.

Main arguments

Allaire backed this point with an example from his company’s business: “It is only in the last few weeks that Circle has been hiring institutional clients who are using these services for small business payments, international transfers and efficient payments for remote workers.” “The dollar on the Internet will soon be as efficient and available as text messaging and email,” he said optimistically.

Brooks brought the message even closer to the main political tensions of the day by highlighting the contrast between tech giants like Meta (formerly Facebook) and the pressure to decentralize cryptocurrencies:

The CEO’s narrative focused on the humanitarian significance of digital assets and their development potential. Cascarilla described crypto as “a really powerful tool for democratizing access”.

The goal of cryptocurrencies is to achieve true decentralization and the projects that succeed will be the ones that do. Bitcoin was successful because there were literally millions of subscribers on the node network and therefore there is no Twitter CEO to piss you off, no JPMorgan CEO to take away your credit card.

It was also Brooks who unveiled the powerful promise of the blockchain-based Web3 era.

Aside from the fiery rhetoric, the message from the industry leaders was clear and direct: the time has come to rethink the rules of the game bilaterally and put an end to suspected government patronage. The industry continues to be overseen by various federal agencies, state regulation is a mess, and the Securities Commission is trying to maintain its control by labeling digital assets as securities.

The last point was clearly highlighted as the main problem: Coinbase’s Haas suggested considering blockchain-based tokens as digital property or a way of registering ownership, which would put them outside of the SEC’s jurisdiction.

Brooks spared no words when it came to highlighting the dysfunctional patterns of the current situation: “What is happening in the United States is you have a new cryptocurrency project and you are entering the SEC and you describe it in great detail and ask about it Orientation, and they say, “We can’t tell you” and “You list it at your own risk.”

Political divisions

Another split over cryptocurrency issues was raised at the December 8th hearing that exists on partisan lines. The Democrats turned their attention to investor protection and volatility, citing the industry as a potential threat to both uninformed investors and the global economy (environmental concerns were also mentioned).

“Currently, cryptocurrency markets lack a global or centralized regulatory framework, making investments in digital assets vulnerable to fraud, manipulation and abuse,” said Waters, chairman of the financial services committee.

Sherman, one of the industry’s staunchest critics, expressed this concern rather vaguely, not to say cryptically, “The forces of our society on Wall Street and Washington have spent millions trying to make thousands of dollars. Millions or trillions. In the world of cryptocurrencies “.

The Republican MPs, who – following a decade-long model of the US electoral system – are supposed to win a majority in Congress in the upcoming midterm elections, have demonstrated a pragmatic approach.

In the words of McHenry, who stands ready to chair the Financial Services Committee if the GOP wins the House again:

This technology is already regulated. Now regulations can be awkward, they can be out of date. I ask my friends, my political friends here on Capitol Hill, this question: do they know enough about this technology to have a serious debate?

The sessions went even further and gave the industry a boost and pledged to support it: “I’m very impressed with what I see, a lot of ingenuity, a lot of entrepreneurship and lots of advice for the future where this is possible to grow, I think it’s very important that we listen. “

Industry response

Despite some disagreement among lawmakers, the hearing sparked a largely positive response from the crypto community, with Jake Chervinsky, Head of Politics at the Blockchain Association calling it “the most positive, constructive and non-partisan public event on cryptocurrency, I’ve seen in Congress “and other experts projecting broadly similar sentiments.

Some representatives also projected an empathic caption after the hearing. Perhaps the most eloquent response came from Meeks, who was moderately optimistic about the future of the sector:

Also noteworthy was the silence of crypto critic Sherman, who is usually an active Twitter user.

What’s next

The optimistic mood of the public contrasts with some of the recent regulatory measures by the US government. For example, the SEC rejected WisdomTree’s application for a spot Bitcoin exchange trade fund after seven months of scrutiny, preventing an investment in a regulated financial product that allows direct exposure to the world’s oldest cryptocurrency.

The hearing will certainly not be the last twist in the cryptocurrency talk, not even for 2021. A stablecoin hearing was held in front of the Senate Committee on Banking, Housing and Urban Development on December 14th.

What He said Representative McHenry: “Congress must work to fully understand and embrace these innovative new technologies, such as the crypto space.” It seems like everyone should prepare for a busy 2022 in terms of cryptocurrency policy and regulation.

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