Crypto executives urge lawmakers to consider tailored legislation for digital assets in Congress

• Cryptocurrency industry executives appeared before Congress on December 8.
• Aims to improve regulators’ and lawmakers’ understanding of the new asset class and how it finds into existing regulations. 
• Crypto CEOs argued for tailor-made legislation for the industry. 

Chief executives from prominent cryptocurrency firms including Coinbase, Circle FTX and several others appeared before Congress on December 8 to testify and respond to questions regarding their products and services in the crypto market. 

Crypto CEOs testify in Congress

Rep. Maxine Waters led the House Financial Services Committee in the hearing, aimed to enhance regulators’ understanding of the new asset class and how the crypto market would fit into existing legislation. She highlighted concerns regarding the leading cryptocurrency’s mining energy usage, weighing against the benefits of Bitcoin.

Waters stated that there were several questions that remain on how traditional rules apply and whether regulators have sufficient authority to protect investors and consumers while encouraging innovation.

Brian Brooks, the former acting controller of the Office of the Comptroller of the Currency (OCC) and CEO of Bitfury said that the topic “is an important one for anyone who cares about American competitiveness in the financial services sector.”

Rep. Anthony Gonzalez (R-OH) stated that Web3 can empower anyone, and further highlighted the prospect of the United States losing out on cryptocurrency-related innovation due to cumbersome regulations. He questioned whether the industry would benefit from a more cohesive policy in the country.

Crypto executives urged Congress to provide more clarity on the overlapping jurisdictions such as the Securities & Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). 

The committee members added that while other countries including Canada have allowed cryptocurrency-based products such as a spot Bitcoin exchange-traded fund (ETF), the United States continues to bar them. Rep. Bryan Steil (R-WI) questioned Coinbase US CEO Alesia Haas for more details about why the SEC disallowed the firm to launch its lending product tied to stablecoins.

Haas responded that the SEC did not provide any clarity on why the product did not get the green light to proceed. 

While the Democratic members expressed concerns about the crypto industry, highlighting the growing carbon footprint of mining operations, some members praised the potential for cryptocurrency wallets to provide lower-cost alternatives to the existing banking system. 

Haas warned that the US risks unnecessarily onerous and chilling laws and regulations if the government does not consider tailored legislative solutions that are openly debated with public participation. 

However, analysts suggest that Congress is unlikely to create new crypto laws anytime soon. 

---