The heads of six major cryptocurrency companies have warned the US Congress that unnecessarily tough restrictions will push cryptocurrency industry participants offshore.
Last Wednesday, a hearing was held by the Financial Services Committee of the House of Representatives of the US Congress, at which the leaders of the leading companies in the cryptocurrency industry spoke with an explanation of their positions. The interest of US lawmakers has emerged amid growing concerns that cryptocurrencies and digital assets could pose systemic and investment risks.
CEOs from Circle, FTX, Bitfury, Paxos, Stellar Development Foundation and Coinbase were invited to the hearing. Company executives drew the attention of congressmen that the cryptocurrency community welcomes the clarity of government regulations that will help the industry expand. Lack of regulation negatively affects both investors and innovation.
However, they expressed concern that overly restrictive rules could be counterproductive. Instead of trying to fit the industry into the current legislation, it would be wiser to make joint regulatory decisions, taking into account its peculiarities and specifics. Alesia Haas, CFO at Coinbase, noted:
“Without special legislative decisions that are openly debated with public participation, the United States risks issuing unnecessarily burdensome and intimidating laws and regulations.”
For their part, members of the US House of Representatives expressed concerns that the explosive growth of cryptocurrencies and, in particular, stablecoins, poses a threat to the US financial system if this sector is not properly controlled.
Some politicians have expressed concern that cryptocurrency products may be used for illegal purposes. In their opinion, the volatility of cryptocurrencies, as well as widely differing standards regarding disclosure of information, reserves, consumer protection and other policies, should cause a high degree of concern for lawmakers.
“Most people I know have invested in cryptocurrencies thinking they can get rich quick. Unfortunately, this only led to financial losses and a crisis, ”said Rep. Juan Vargas.
Crypto executives agreed that the rapid growth in the sector underscores that investors have an interest and demand for digital assets, and supervisors should support it with clear rules, not suppress it.
Legislators need to consider the opportunities blockchain can bring to governments, financial institutions, companies and citizens. You need to exercise common sense, as the current financial system is also not without risks, costs and security problems.
“We must take seriously the possibility that open source algorithms and software that account for human error, greed, negligence, fraud and system bias can make the system better, even if there are some new risks that need to be understood and managed. “- said the CEO of Bitfury Brian Brooks (Brian Brooks).
According to Brooks, if the US Congress does not heed the opinion of the industry and does not act quickly enough, then cryptocurrency firms may relocate their activities to other regions with more favorable conditions. So, on the territory of the island of Puerto Rico, there is no tax on profits from operations with cryptocurrencies.
However, according to analysts, Congress is unlikely to pass new rules for regulating the cryptocurrency industry anytime soon. Legislators planned the hearings for educational purposes and viewed them as a fact-finding exercise.
I am Derek Black, an author of World Stock Market. I have a degree in creative writing and journalism from the University of Central Florida. I have a passion for writing and informing the public. I strive to be accurate and fair in my reporting, and to provide a voice for those who may not otherwise be heard.