06 Jul House committee reviews cryptocurrency risks, regulations in hearing
A House committee considers how to promote innovation, protect consumers and guard against potential financial crime in the cryptocurrency industry.
In the wake of the Facebook and Cambridge Analytica scandals, the importance of protecting user data has been on the minds of many. Following the hearings, which examined the risks and rewards of the cryptocurrency and blockchain industries, the House Committee on Energy and Commerce is scheduled to hold its first hearing on virtual currencies.
The House of Representatives Financial Services Committee is holding a hearing today on cryptocurrency and blockchain technology. The hearing is scheduled for 2:30-3:30pm EST in the Rayburn House Office Building. The committee’s hearing is one in a series of hearings being held by the committee on the topic of cryptocurrencies and how they have performed in the past and may perform in the future.. Read more about is cryptocurrency legal and let us know what you think.
The Financial Services Committee of the US House of Representatives held a hearing Wednesday for lawmakers and a panel of witnesses to discuss the regulation of cryptocurrencies in the United States.
The Subcommittee on Oversight and Investigations invited experts to testify before Congress on the risks and opportunities of blockchain technology.
Rep. Brad Sherman (D-MN), a member of the House Financial Services Committee, was not enthusiastic about investing in cryptocurrencies for retirement:
Cryptocurrencies are highly volatile. So if one person makes a million dollars and retires at age 45 and nine people lose $100,000, Coinbase makes money and one millionaire gets on TV to say how great that is, while nine others don’t retire gracefully and get Medicaid.
He also said the California lottery would be a better bet than blockchain:
Cryptocurrencies are something to bet on, but if people want the animal spirit to take risks, I’d rather invest in the stock markets to help build American businesses, or in the California lottery to support schools in my state.
But Rep. Tom Emmer (R-MN), another senior member of the committee, is more concerned that regulatory intervention will prevent Americans from taking full advantage of cryptocurrency entrepreneurship:
Over the past few years, I’ve been lucky enough to meet many great innovators in the cryptocurrency and blockchain space. During our conversation, we often talked about how much they want to develop their cryptocurrency and blockchain ideas here in the US. But they won’t, because of the current uncertainty over the regulation of cryptocurrencies.
The lessons learned from the 2008 financial crisis seemed to hover over the testimony of witnesses and members of Congress. That year, the subprime mortgage crisis in the mortgage industry quickly spread to adjacent financial sectors.
When that happened, a frenzied series of innovative – and unwieldy – new financial instruments wiped out large masses of investors and plunged the entire US economy into recession.
The structural instability and excessive euphoria that characterized this period of rapid growth in new derivative securities were exacerbated by enormous leverage.
In recent years, there has been a rapid proliferation of new companies and technologies that support and expand the capabilities, use, exchange and circulation of cryptocurrencies – and the blockchains that support them. Some lawmakers and regulators fear this could be reminiscent of what happened in 2008.
Attempts to regulate blockchain technology and mitigate the risks associated with securities trading are a complicated patchwork as lawmakers struggle to understand the new technology and the industry it spawns.
Not all federal lawmakers are wary of cryptocurrencies. Some even argue for it. In a recent interview with CNBC, Senator Cynthia Lummis (R-WY) said she hopes bitcoin becomes an integral part of a diversified retirement portfolio as a protection against inflation. And earlier this month, the National Republican Congressional Committee began accepting crypto donations to fund the campaign.
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