Recently, the US Senate Banking Committee conducted a hearing on cryptocurrency. Attended by representatives from the SEC and Commodity Futures Trading Commission, the hearing was sought by congressional representatives to learn more about crypto fraud and abuse. Leading up to the hearing, crypto fans were fairly apprehensive about what regulators had planned. Fortunately, the hearing was welcomed by the community upon its conclusion.
J. Christopher Giancarlo, chairman of the Commodity Futures Trading Commission, and Jay Clayton, a counterpart at the Securities Exchange Commission were the two representatives invited to present their observations at the hearing. Prior testimony was released to the hearing that detailed the hearing’s objective. Observers noted the SEC’s looming skepticism about cryptocurrency, particularly publicly-voiced concerns about scams and rampant ICO’s. However, the hearing was conducted with much revere. Indeed, the two representatives showed much more enthusiasm than expected.
Recall, early adopters of cryptocurrency and blockchain technology feared that regulators getting involved would undermine decentralization. In reality, this is not the case. The SEC’s representatives fashioned an understanding about crypto fundamentals. They even acknowledged the elimination of banking as an intermediary in the exchange of crypto. Rather than “attack” cryptocurrency and decentralization, they offered a solid framework for mass adoption and a constructive outlook for regulation.
Nonetheless, crypto regulation and the implication by the SEC is still very much a grey area. Moreover, the hearing was primarily conducted as an introduction to Congress and a means for setting precedence. Prior to the hearing, related testimony invited lobbyists and lawmakers to be more proactive in establishing the rules and regulations.
What does that mean for the cryptocurrency field? Perhaps that government agencies are not naive about crypto’s growth and potential. As Chairman Gaincarlo stated, “We owe it to this new generation, to respect their interest in this new technology with a thoughtful regulatory approach”. Indeed, the hearing is littered with statements from congressmen about adopting the technology. Instead of turning a cold shoulder to the issue, Congress is ushering the idea to mainstream attention.
It remains to be seen what the future holds for crypto regulation. Regardless, the public should not be unduly alarmed. Crypto regulation does imply that all entities and investors will be audited and scrutinized. As with the stock market, reporting will remain the primary focus of regulatory agencies. As such, exchanges like Coinbase will have to become more transparent in their activities. And for investors, any new standards along these lines will only reinforce investor confidence in these exchanges.
In the end, the Senate hearing Government was perceived less as unwelcome interference than as a means to smartly advocate for decentralization and blockchain technology. Future regulations may slow the break-neck speed at which exchanges are growing, but such moves are meant to safeguard the crypto ecosystem. Its imperative that investors recognize the upside to having regulation and decentralization coexist within this ecosystem. These regulatory agencies merely ask that the facilitators of cryptocurrency exchange become more transparent about their finances.
A door has been opened for everyone to participate. Its time to write government officials and urge them to remain advocate for this new and burgeoning market. There is no turning back from this point. And now is the time to make an impact. Pen strokes are shaping the future as you read this, so we must not hesitate. When lobbyists and lawmakers understand that investors are watching, they’re far more likely to implement sensible policies that garner market support (whether they understand the technology or not). As early adopters, today’s crypto investors have a remarkable opportunity to influence future crypto regulation and policy-making.