U.S. Congress Holds Hearing to Weigh Pros and Cons of Cryptocurrencies

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Odaily Translator | Nian Yin Si Tang

Summary:

Summary:

- On Wednesday, the U.S. Congressional Oversight and Investigative Subcommittee brought together a group of cryptocurrency experts.

- Members of Congress are keen to study the risks and potential opportunities of cryptocurrencies, and their impact on the financial system.The US Congress Supervision and Investigations Subcommittee of the House Financial Services Committee brought together cryptocurrency experts on Wednesday to discuss regulatory issues.。

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Those experts included Peter Van Valkenburgh, research director at Coin Center, a nonprofit focused on policy issues facing cryptocurrencies, and Alexis Goldstein, director of financial policy at the Open Market Institute think tank. Together with members of Congress, they participated in a public discussion about the benefits and risks of digital assets and blockchain technology.

Here are five key takeaways from their discussions:

1. The crypto industry needs better regulation

Rep. Tom Emmer worried that the U.S. might not be able to reap the full benefits from cryptocurrency entrepreneurs if innovation is stifled by regulatory clarity, a concern shared by many other congressmen and crypto experts.

He called for a robust digital asset classification system to determine whether cryptocurrencies are securities, commodities, or deserving of the same treatment as fiat currencies. He also highlighted the potential of bitcoin and blockchain platforms to create better levels of transparency and trust than traditional systems.

2. Lawmakers worry about a repeat of the 2008 financial crisis

Meanwhile, the rapid innovation and expansion of the crypto industry, and its recent appeal to retail investors, has also drawn some attention from lawmakers. With the rapid emergence of new businesses, platforms and tools that encourage and support the use of cryptocurrencies, some lawmakers have warned that we could be witnessing a repeat of the 2008 financial crisis and worried that the state may need to prop up the cryptocurrency market.

3. Democratic Rep. Brad Sherman Wants to Ban Bitcoin

Brad Sherman, representative of California's 30th congressional district, said that "people would rather 'bet' on the stock market or the California lottery than have them invest in cryptocurrencies".

He called for a ban on bitcoin and cryptocurrencies because they are "highly volatile" and have "political support from patriotic anarchists who support tax evasion. I wish we could ban it," Sherman said.

4. Most members of Congress are eager to learn more about cryptocurrencies

Unlike Rep. Sherman, most members of Congress are eager to learn more about cryptocurrencies, including their impact on market volatility, the environment, and more.

Van Valkenburg was keen to inspire them, emphasizing the transparent and peer-to-peer nature of the technology, as well as its censorship resistance and sustainability compared to the traditional financial system. He also added that the traditional financial system "uses an estimated five times as much energy as Bitcoin. Granted, the traditional financial industry moves more money. But it's worth noting that Bitcoin's energy use doesn't scale with every transaction." The trade continues to expand.”

5. The money laundering potential of legal currency far exceeds that of cryptocurrency

Rep. Anthony Gonzalez made a point in the debate on cryptocurrencies and anti-money laundering (AML) that was rarely cited. “When it comes to the idea of ​​anti-money laundering, should we allow comments about cryptocurrencies, I just want to ask, compared to what? Compared to fiat currency where 99% of money laundering is not prosecuted?”

This is an argument made by many advocates in the crypto space and even traditional banking institutions. A September 2020 report by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) noted that the number of confirmed cases of money laundering using cryptocurrencies remains relatively low compared to money laundering through traditional methods.