Crypto regulation could see a major overhaul as House Republicans take steps to revamp the oversight of the emerging class asset.
According to Rep. French Hill, who leads the Digital Assets, Financial Technology, and Inclusion Subcommittee, the House Financial Services Committee has drafted a series of smaller bills in recent months, but the committee intends to tackle broader issues in the coming months.
On Crypto Regulation & Crackdowns
On Thursday, Paul Grewal, the chief legal officer of Coinbase, testified at a hearing. In his prepared remarks, he urged the establishment of a crypto regulation that would both support the sector and safeguard consumers.
“We need policymakers to work together to develop a comprehensive framework that provides pathways for customers to access both digital asset commodities and digital asset securities in the U.S.”
There is little information on what the committee plans to propose, but it comes as federal banking and markets officials step up their enforcement of traditional financial standards in the crypto industry.
The companies dealing with digital assets are pressing Congress to create a unique set of regulations for cryptocurrencies, similar to what has been done in various regions such as the European Union.
Dire Need For Crypto Oversight
In spite of Republican calls for crypto regulation, several proposals in the committee are pro-industry, suggesting that Grewal’s recommendations are being taken to heart.
The need for government and regulatory oversight of cryptocurrency stems from several concerns related to the digital currency’s decentralized and often anonymous nature.
Without oversight, experts worry that cryptocurrencies could be used for illicit activities, such as money laundering, terrorism financing, and tax evasion.
Additionally, cryptocurrency markets have been known to experience extreme volatility, with prices fluctuating wildly in short periods. This volatility creates risks for investors and could lead to broader economic instability if left unchecked.
Moreover, as cryptocurrencies gain wider acceptance, concerns have emerged about the potential impact on traditional financial systems and monetary policies. Regulators also worry about protecting consumers from fraudulent activities and ensuring the stability of the financial system.
Proponents of crypto regulation argue that reasonable regulations can help prevent illicit activities, safeguard consumers, and support the long-term growth and stability of the cryptocurrency market.
Some of the measures aim to show congressional support for blockchain technology and digital assets, while others would exempt blockchain developers from certain reporting and licensing requirements or reduce the amount of tax information that crypto businesses would have to provide.
Likewise, Federal Reserve Chair Jerome Powell said this week that House should weigh in during his testimony on Capitol Hill.
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