Crypto CEOs told lawmakers they needed tailor-made rules openly debated with public participation to avoid unnecessarily burdensome regulations. The cryptocurrency chiefs also warned legislators that overly burdensome regulations would push the asset overseas.
The top executives of six leading cryptocurrency companies have urged the U.S. Congress to offer more transparent rules for the burgeoning $3 trillion industry. Appearing before the House Committee on Financial Services, the CEOs seemed to present a united front urging lawmakers to provide a clear regulatory framework for crypto.
The chief executives from Coinbase, Circle, FTX, Bitfury, Paxos, and Stellar Development Foundation broadly embraced regulation amid explosive growth in digital currencies. However, amid polite but skeptical questioning, many executives voiced support for a new regulatory framework. They also opposed the use of existing banking laws to regulate the crypto space. Their appearance in Congress comes as regulators and lawmakers look to craft new rules for digital assets.
Understanding the crypto space
Testifying before the House Financial Services Committee for nearly five hours, the executives fielded questions from lawmakers on understanding the crypto space, ransomware, how to protect investors against losses and fraud, and providing services for the unbanked. Paxos CEO Charles Cascarilla told lawmakers:
“The solution is not to shoehorn digital asset operations into a regulatory system designed for earlier generations of financial assets.”
The House of Representatives Committee on Financial Services hearing marked the first time the industry’s senior leaders have explained their businesses to U.S. lawmakers amid growing concerns that cryptocurrencies may pose systemic risks and hurt investors. Some lawmakers, in particular Republicans, praised the executives for leading the way on what could be a pivotal technology. Representative Pete Sessions, a Texas Republican, said:
“I am tremendously impressed. I see a lot of ingenuity, a lot of entrepreneurial spirit […] we need to be supportive of you.”
What will lawmakers do with this new information
Crypto executives repeated calls for careful, bespoke rules rather than forcing the industry to comply with existing regulations. Alesia Haas, chief executive of Coinbase Inc., warned:
“Without tailored legislative solutions that are openly debated with public participation, the United States risks unnecessarily onerous and chilling laws and regulations.”
The question remains what will lawmakers do with this new information, and how could they craft new rules. Judging by Wednesday’s hearing, there was little immediate resolution about how urgently policymakers will act, if at all.