About the Senate Banking Committee Hearing on Cryptocurrency

The Senate Banking Committee Hearing on cryptocurrency is occurring on February 6th, 2018. We explain and offer updates.[1]

Although it is likely the regulation of things like ICOs will be pushed for (an ongoing theme that has already been in the works), the Senate Banking Committee Hearing on cryptocurrency was almost all good news. That is, those testifying seemed positive and the members asking questions seemed sincere and all seemed to understand and praise the positive aspects of digital currencies.

Concerns and praises are what you would expect. Concerns were about scams, illegal behavior, volatility, and vulnerabilities, and praise was focused on the technology and how crypto is no more volatile than some other asset classes.

Essentially, the case was made (by Jay Clayton head of the Securities and Exchange Commission SEC and J. Christopher Giancarlo Chairman of the Commodity Futures Trading Commission CFTC) for the importance of digital currency and the technology behind it, but some members were raising concerns about worst practices.

“It strikes me that we owe it to this new generation to respect their enthusiasm about virtual currencies with a thoughtful and balanced response, not a dismissive one.” – Giancarlo

Given the above, one can expect that the government will take an approach where they confirm their stance on Bitcoin and crypto. That is, crypto is legal, taxable, tradable, and drives very important technology… but crypto scams are going to get cracked down on and potentially there will be some sort of regulations to help ensure against the worst aspects of crypto.

In other words, the hearing was all about embracing crypto (like the South Korea stuff ended up being). Embracing is legitimizing. This hearing is so far good news, although we can’t know what sort of rules and regulations will come from it.

The only things to me that were clear were 1. Running crypto scams is not going to end well for the scammers (so shady ICOs who don’t attempt to comply with federal rules and companies who call themselves “blockchain” probably have their clock ticking) 2. Crypto is here to stay and government, industry, and finance are looking towards a future with crypto.

As far as government hearings on crypto go, this was rather good. One would assume if the market wasn’t already in correction mode this would be a big day for crypto. Although, we probably shouldn’t pop the champaign until any potential rules and regulations are produced.

Watch the Banking Committee hearing on Cryptocurrency live here. It is hard to find an archived version, but you can see this one for now: LIVE SEC & CFTC Crypto Currency Meeting With U.S. Senate Committee.

NOTE: Since the topic has come up, we will hopefully see some more crypto ETFs come on the market (currently only having one crypto stock of the market, GBTC, gives investors limited choices; this paves the way for lackluster companies who try to use the concept of “blockchain” to try to draw attention to their stocks). Competition isn’t just welcome, it is necessary to avoid over inflated prices!

NOTE: J. Christopher Giancarlo has been a rock star of the hearing. He has been doing a great job being honest about the problems of crypto while standing firmly behind its perks. See: WRITTEN TESTIMONY OF J. CHRISTOPHER GIANCARLO CHAIRMAN, COMMODITY FUTURES TRADING COMMISSION BEFORE THE SENATE BANKING COMMITTEE WASHINGTON, D.C. FEBRUARY 6, 2018.

“We are entering a new digital era in world financial markets. As we saw with the development of the Internet, we cannot put the technology genie back in the bottle. Virtual currencies mark a paradigm shift in how we think about payments, traditional financial processes, and engaging in economic activity. Ignoring these developments will not make them go away, nor is it a responsible regulatory response. The evolution of these assets, their volatility, and the interest they attract from a rising global millennial population demand serious examination. With the proper balance of sound policy, regulatory oversight and private sector innovation, new technologies will allow American markets to evolve in responsible ways and continue to grow our economy and increase prosperity. This hearing is an important part of finding that balance”

– Giancarlo

Article Citations
  1. CFTC Chairman to Senators on Bitcoin: “We owe it to this new generation to respect their interest.” BtcManager.com.

Author: Thomas DeMichele

Thomas DeMichele has been working in the cryptocurrency information space since 2015 when CryptocurrencyFacts.com was created. He has contributed to MakerDAO, Alpha Bot (the number one crypto bot on Discord),...

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