Crypto industry to move overseas if Congress fails to act, executives warn

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Executives from six major digital asset companies testified on the state of the industry before Congress on Wednesday Members of the House Financial Services Committee have different approaches to crypto

As U.S. policymakers continue to wonder how to regulate the growing digital asset industry, executives from major cryptocurrency companies appeared before Congress on Wednesday to provide and seek clarification.

Representative Maxine Waters (D-Calif.), Head of the House Financial Services Committee, convened the hearing, which was titled “Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the USA “

Rep. Patrick McHenry (R-NC) was one of many lawmakers who expressed a more favorable view of the emerging asset class.

“I ask my friends on the Hill, do you know enough about this?” He said, referring to his colleagues on the committee, who he said did not understand the technology enough to be able to create regulations.

Bitfury CEO Brian Brooks, who previously served as Comptroller of the Currency under President Donald Trump before a brief stint at Binance.US, pleaded with lawmakers to look beyond the investment side of the industry.

Lawmakers need to consider the innovation that blockchain technology can bring to governments, businesses and citizens, he said. The current financial system is not without risks, costs and security concerns, Brooks said.

“Shouldn’t we take seriously the possibility that algorithms and open source software that take a measure of human error, greed, neglect, fraud and system bias might actually improve the system, on the net, even if there are new risks presented which must be understood and regulated? He asked the committee.

FTX CEO Sam Bankman-Fried noted that cryptocurrency technology can help solve many problems Congress has already identified.

“When you look at the number of underbanked or unbanked people in the United States and around the world, it indicates a system that doesn’t work for everyone,” Bankman-Fried said. “Cryptocurrencies offer a potential way to solve a number of these problems, making it easier, cheaper, faster and more fair for people to do what they need to run their financial lives. “

Representative Alexandria Ocasio-Cortez (D-NY) had doubts.

“What do you say to people who say, ‘This doesn’t sound like a new financial system per se, but an expansion of the old one? “She asked when asking Jeremy Allaire, CEO of payments company Circle, who spoke after Bankman-Fried.

“I truly believe that we are building a new layer of global economic infrastructure,” Allaire replied, adding that regulations need to become clearer if policymakers want companies to continue to innovate.

If the United States doesn’t act quickly enough, cryptocurrency firms will move to other countries with more favorable regulations, Brooks said, noting the lack of a Bitcoin spot ETF. When a spot product is already available in other countries, nothing prevents issuers from doing their business elsewhere, he argued.

“Some products are legal in other countries and just aren’t legal here,” Brooks said. “If you are an ETF developer, there is no fuzzy line, it’s very clear: you can’t do that here, so you have to go overseas. “

Other witnesses included Alesia Haas, Global Chief Financial Officer of Coinbase, Chad Cascarilla, CEO of Paxos and Denelle Dixon, CEO of the Stellar Development Foundation.

A full recording of the hearing is available here.

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Ben strack

Ben Strack is a Denver-based reporter who covers macroeconomics, financial services, and digital asset management. Prior to joining Blockworks, he covered the asset management industry for Fund Intelligence and was a reporter and editor for various local newspapers on Long Island. He graduated from the University of Maryland with a journalism degree.

Casey wagner

Blockworks

Journalist

Casey Wagner is a New York-based business journalist who covers digital assets and macroeconomics. Prior to joining Blockworks, she reported on the markets at Bloomberg News. She graduated from the University of Virginia with a degree in Media Studies.

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