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US Crypto Regulations Risks ‘Cold Cold’, Industry Warns Congress

Milken Institute Global Conference 2021
FILE PHOTO: Coinbase CFO, Alesia Haas, arrives during the Milken Institute Global Conference 2021 in Beverly Hills, California, U.S., October 18, 2021. REUTERS/David Swanson

December 8, 2021

By Pete Schroeder and Katanga Johnson

WASHINGTON (Reuters) – Top executives from six crypto firms told Congress on Wednesday to gently impose new rules on digital assets — or send operational risks underground or outside the United States.

At a hearing at the US House of Representatives Financial Services Committee, executives leading some of the world’s largest cryptocurrency companies indicated in prepared testimony that they generally support clearer rules. But they stressed that excessive restrictions would not stifle activity, but only push it out of reach of the United States.

Alesia Haas, chief executive officer of Coinbase Inc, warned: “Without appropriate legislative solutions that are publicly debated with public participation, the United States will be at risk in terms of laws and regulations. unnecessarily unpleasant and cold,” warned Alesia Haas, chief executive officer of Coinbase Inc, in testimony published Tuesday.

“This could effectively drive crypto activity underground or to foreign exchanges that have little or no compliance program.”

The testimony, released by the panel ahead of the hearing, sets the stage for a closely watched and high stakes event, as U.S. lawmakers publicly press crypto executives to protect themselves. protect their businesses and come up with ideas to control them.

Representative Maxine Waters, a Democrat who chairs the panel, said “there are some questions” about the need for new rules for cryptocurrencies, while highlighting concerns about the use of cryptocurrencies. considerable energy for mining and trading cryptocurrencies.

“The crypto market does not have an overarching or centralized regulatory framework, leaving investments in the digital asset space vulnerable to fraud, manipulation, and abuse,” she said.

However, it was clear from the start of the hearing that lawmakers did not have the prevailing skepticism towards the market. In contrast, Representative Patrick McHenry, the top Republican on the panel, urged lawmakers to find ways to promote cryptocurrencies with sufficient safeguards.

“We should embrace it, we should understand it, and we should be international leaders in this area,” he said.

DIGITAL ASSETS

The rapid growth of cryptocurrencies, and especially “stablecoins”, as digital assets whose value is pegged to traditional currencies, has attracted the attention of regulators, who are concerned They are concerned that they can put the financial system at risk if not properly supervised.

Some policymakers, such as Senator Elizabeth Warren and Securities and Exchange Commission Chairman Gary Gensler, are also concerned that the products could be used for illegal purposes or to take advantage of unsuspecting consumers.

In November, a working group led by the US Treasury Department recommended that Congress pass a law stating that stablecoins should only be issued by companies that insured their deposits, like banks. . According to analysts, Wednesday’s hearing could be a good sign that Congress will pass any such digital currency legislation.

Executives have said they would welcome regulatory clarity, but overly restrictive rules could backfire.

“Stablecoins and natural capital markets are not too big to fail, but they are too big right now to ignore,” said Jeremy Allaire, CEO of Circle Internet Financial. “Policy frameworks need to support an open and competitive playing field, while allowing new technologies to flourish.”

Proponents say stablecoins could revolutionize payments by providing a reliable, low-cost, fast way to transfer money globally. Executives argue that the United States should play a leading role in promoting that technology, much as US rules have allowed the Internet to flourish in its early stages of development in the 1990s.

“Let’s work together to ensure that U.S. policymakers are the frontrunners for a smart, efficient regulatory roadmap for this technology around the world,” said Denelle Dixon, who head of the Stellar Development Fund, said in his prepared testimony.

“I hope that we can all agree that cryptocurrencies and stablecoins should not be buzzwords, thrown around to incite fear of the unknown.”

(Reporting by Katanga Johnson and Pete Schroeder in Washington; Editing by Megan Davies, Dan Grebler, Alison Williams and Andrea Ricci)

https://www.oann.com/u-s-risks-chilling-regulations-on-crypto-industry-warns-congress/?utm_source=rss&utm_medium=rss&utm_campaign=u-s-risks-chilling-regulations-on-crypto-industry-warns-congress US Crypto Regulations Risks ‘Cold Cold’, Industry Warns Congress

Bobby Allyn

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