Today, the subcommittee of the Senate Banking of the United States on digital activities has hosted an audition entitled “explore the bipartisan legislative framework for the structure of the digital activities market” in which the panelists involved the congress to approve the legislation of digital resources soon.
(Spoiler warning: The word “bitcoin” did not emerge once at the hearing. Having said that, Bitcoin would be subject to some of the cryptographic regulations discussed in the hearing. Therefore, it is important as a bitcoin enthusiast to understand what has been said.)
The hearing took place in the wake of the senators Cynthia Lummis (R-Wy), Thom Tillis (R-NC), Bill Hagerty (R-TN) and the President of the Senate Banking Tim Scott (R-SC) which issues principles for the structure of the digital activities market this morning. (See the complete list of principles here.)
Senator Lummis presided over the event and started it by touching some of the aforementioned principles, while adding even respectable that now that the Senate has voted on the Genius Act, the United States are about to enter the 21st century in the financial sense.
The senator was achieved by senators Bill Hagerty (R-TN), Bernie Moreno (R-Oh), Angela Alsobrooks (D-MD), Dave McCormack (R-P) and the group of witnesses including:
- Sarah Hammer, Executive director of the Wharton school of the University of Pennsylvania
- Greg Xethalis, General Consultant of Multicain Capital and member of the Board of Directors of the Blockchain Association and the Defi Education Fund
- Ryan Vangrack, Vice President of Legal at Coinbase
- Honorable Rostin Behnam, illustrious Fellow at the PSaros Center for Financial Markets & Policy, Georgetown University and former president of the US Commodity Futures Trading Commission (CFTC).
Fight illegal activity in the cryptographic space
In the first round of questions from Senator Lummi, both Behnam and Hammer underlined the importance of fighting the illegal activity that involves digital activities through clear anti-money laundering rules and anti-terrorism financing, although neither of them entered in detail on how it might appear.
When Senator Lummis asked Hammer which country the United States should take note of when it comes to its anti -terrorist financing regulation for Crypto, Hammer mentioned Singapore.
Before getting out of the topic of combat the illegal cryptocurrency activity, Behnam said that the more the congress awaits to approve global legislation on the market structure, the more space gives unpleasant actors to be operated.
“The bad actors will gravitate to unregulated areas,” said Behnam.
Consumer protection for cryptocurrency investors
Senator Hagerty, the main sponsor of the Genius Act, who recently approved in the Senate, praised bipartisan efforts in the legislative process around digital resources, alluding to the idea that he would like to see his colleagues maintain the momentum.
And on the theme of Bipartisship, the only democratic senator present at the hearing, Senator Alsobrooks, seemed optimistic on the potential of the cryptocurrency but also worried about the creation of the adequate guardrails for investors.
He asked Behnam which of consumer protection elements were essential for cryptographic investors.
Behnam cited the “bankruptcy protection” as the most important element of consumers protection.
“Customer resources must be completely separated so that there are no doubts in case of failure that the activities will be returned to customers,” said Behnam.
The price of not being able to legislate in cryptocurrency in the United States
Towards the last part of the hearing, Senator Moreno asked the panelists how long the United States must pass the regulation of cryptocurrencies and what could be the price of not succeeding.
Xethalis replied saying “we have to act now”, before sharing those who believed were the two major potential costs of the United States who do not act soon.
He said that the first cost is that other jurisdictions can issue more onerous rules for cryptocurrency, which could cause friction if adopted globally. He quoted Europe which issued rigid rules for the internet trade decades ago as precedents for this.
Xethalis therefore argued that the second cost is cheap. He said the United States are behind both the development of 5G and in the production of silicon chips and stressed that he does not want to see the same happen with Crypto.
A call for Bipartisship
Senator Lummis closed the hearing by implementing his colleagues senators and panelists to engage in bipartisan discussions and to work through the corridor, as he did with Senator Gillibrand.
He observed that it seems that some democrats have been reluctant to engage in the legislative process on the cryptocurrency because the family of President Trump is involved in the sector, adding that the cryptocurrency is greater than the involvement of the President’s family and that the Democrats should recognize it.