The chief executives of six cryptocurrency companies testified for nearly five hours on Wednesday before the House Financial Services Committee about the promises and perils of cryptocurrencies.
The hearing was called by Representative Maxine Waters, the California Democrat who leads the committee, as part of an effort to understand fast-growing digital assets — and how to regulate them. It followed familiar partisan patterns, with Democrats expressing concern about crypto’s risks as Republicans emphasized innovation and said that strict regulation would drive the industry away from the United States.
Ms. Waters expressed concern about how quickly crypto is being adopted, noting that the “rapid growth” has been fueled in part by celebrity endorsements. These digital assets currently have no “overarching regulatory framework” at the federal level, she said.
Her Republican counterpart on the committee, Representative Patrick T. McHenry of North Carolina, said that his colleagues may not be as steeped in the technology as they need to be to write new rules: “I ask my friends on the Hill, do you know enough about this?”
In one later exchange, Representative Alexandria Ocasio-Cortez, Democrat of New York, expressed doubt about executives’ arguments that crypto represented a radical reshaping of commerce and finance. “What do you say to the folks that say this doesn’t seem like a new financial system per se but an expansion of the old one?” she asked Jeremy Allaire, the chief executive of the payments company Circle.
“I really do believe we are building a new global economic infrastructure layer,” Mr. Allaire replied, adding that crypto needs to be integrated with the traditional financial system, creating “a hybrid model.”
Brian Brooks, an acting comptroller of the currency under President Donald J. Trump and now the chief executive of the blockchain technology company Bitfury, asked lawmakers to consider the decentralization that crypto systems can offer and whether Americans want an internet that puts ownership in the hands of users as opposed to a few giant tech companies.
Eroding the power of the tech giants, an issue with bipartisan support in Congress, is an argument commonly advanced by crypto enthusiasts to promote web3 — the industry term for a vision of the next generation of the internet run on blockchain-based tokens. But Ms. Waters probed the panel about the role of Big Tech in the crypto economy.
She told Charles Cascarilla, the head of Paxos, that she was “concerned” about a pilot program his company was involved in with Novi, a digital wallet created by Meta, the parent company of Facebook. Ms. Waters worried about billions of social media users worldwide someday transacting in crypto using …….
Source: https://www.nytimes.com/2021/12/08/business/house-financial-services-crypto.html
