Crypto executives urge light touch as Congress mulls new regulation

WASHINGTON, Dec 8 (Reuters) – Top executives from six main cryptocurrency corporations together with Coinbase and Circle on Wednesday urged Congress to supply clearer guidelines for the booming $3 trillion business, however warned that overly powerful restrictions would push it abroad.

The U.S. House of Representatives Financial Services Committee hearing marked the primary time the business’s senior leaders have defined their companies to U.S. lawmakers amid rising considerations cryptocurrencies might pose systemic dangers and harm buyers.

Crypto executives repeated requires cautious, bespoke guidelines slightly than forcing the business to adjust to current rules.

“Without tailored legislative solutions that are openly debated with public participation, the United States risks unnecessarily onerous and chilling laws and regulations,” warned Alesia Haas, chief govt of Coinbase Inc.

Congress is unlikely to make new crypto guidelines anytime quickly, based on analysts, and lawmakers handled the listening to primarily as a fact-finding train.

Democratic Representative Maxine Waters, who chairs the panel, mentioned there are questions on correct oversight and singled out Facebook Inc’s (FB.O) stablecoin plans as a significant concern given the corporate’s large international attain.

Some lawmakers, specifically Republicans, praised the executives for main the way in which on what might be a pivotal know-how.

“I am tremendously impressed. I see a lot of ingenuity, a lot of entrepreneurial spirit,” mentioned Representative Pete Sessions, a Texas Republican. “We need to be supportive of you.”

Circle CEO Jeremy Allaire, FTX Trading CEO Sam Bankman-Fried, Paxos CEO Chad Cascarilla, Stellar Development Foundation CEO Dennelle Dixon and BitFury head Brian Brooks additionally testified.

DIGITAL ASSETS

The speedy development of cryptocurrencies and specifically stablecoins — digital property pegged to conventional currencies — has caught the eye of regulators, who concern they may put the monetary system in danger if not correctly monitored.

Some policymakers, such as Senator Elizabeth Warren and Securities and Exchange Commission Chair Gary Gensler, are additionally involved the merchandise might be used for illicit functions, or to make the most of unsuspecting customers.

In November, a U.S. Treasury-led working group beneficial Congress move a regulation specifying stablecoins ought to solely be issued by corporations which have insured deposits, like banks. learn extra

Executives mentioned they might welcome regulatory readability, which might assist the business broaden, however that overly restrictive guidelines might show counterproductive.

The speedy development within the sector underscores there’s sturdy investor urge for food for digital property and must be supported with clear guidelines slightly than stifled, they mentioned.

BitFury’s Brooks, who was previously CEO of Binance’s U.S. enterprise and earlier than {that a} financial institution regulator, advised lawmakers cryptocurrencies are just like conventional property.

“We are the last country standing that hasn’t figured that out,” he mentioned.

But the complexity and volatility of cryptocurrencies, as properly as wildly various requirements round disclosure, reserves, client safety and different insurance policies left some lawmakers involved.

“Most of the people that I know that have invested in cryptocurrencies (have done so)…because they think they can get rich quick,” mentioned Representative Juan Vargas. “We’ve seen this before, unfortunately, and it led to the financial crisis.”

Reporting by Katanga Johnson and Pete Schroeder in Washington; Editing by Megan Davies, Dan Grebler, Alison Williams, Andrea Ricci, Michelle Price and Cynthia Osterman

Our Standards: The Thomson Reuters Trust Principles.