Blockchain Industry Executives Set to Testify Before Congress

key takeaways

Executives from Bitfury, Paxos, and Stellar Development Foundation will also testify at hearing of US House Committee on Financial Services
Circle Co-founder Jeremy Allaire to recommend that “the US should aggressively promote the use of the dollar as the primary currency of the internet”

Executives of some of the largest crypto companies in the world are set to testify before the US House Committee on Financial Services on Wednesday.

The hearing — called Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States — will feature testimony from FTX CEO Sam Bankman-Fried, Circle CEO Jeremy Allaire and Alesia Haas, the CFO of Coinbase Global.

The other crypto firm leaders set to testify include Bitfury CEO Brian Brooks, Paxos CEO Chad Cascarilla and Denelle Dixon, the chief executive of Stellar Development Foundation.Though some might interpret the invitation as US legislators taking a hostile approach towards digital assets, it should rather be seen as a positive signal, said Mikkel Morch, executive director at crypto hedge fund ARK36.

“Cryptocurrencies have been on the radar of top US politicians for a long time now, yet the Congress hasn’t yet decided to take any substantial regulatory action towards it,” Morch said.

“One should hope the committee is a sign that US congressmen and congresswomen are willing to learn more about this burgeoning and extremely innovative market sector before taking any action that could potentially cripple it.”

Martha Reyes, head of research at digital asset prime brokerage and exchange BEQUANT, said in an email that it is key for politicians to understand the implications of any crypto-related laws they may enact. She added that the hope is that the US becomes the first major crypto-friendly economy.

Morch said he doesn’t expect the US to follow China’s approach to crypto. The People’s Bank of China (PBOC) told the country’s key financial institutions in June to block all cryptocurrency transactions, and its regulators have intensified a ban on bitcoin in recent months.

But, Morch added, he believes there will be tighter regulation related to stablecoins, noting that it is becoming more likely that the US government will seek to “severely restrict” what entities will be able to issue stablecoins.

Circle launched its stablecoin, USD Coin (USDC), in September 2018.

“In a world where money becomes a core feature of the internet, the US should aggressively promote the use of the dollar as the primary currency of the internet, and leverage that as a source of national economic competitiveness, security and a major upgrade needed for more efficient and inclusive financial services,” Allaire, Circle’s co-founder, said in a blog post published Tuesday.

Allaire will also be speaking about the expanding use cases for stablecoins across both institutional and startup businesses, according to a Circle spokesperson, including small business payments, international low-cost, high-speed remittances and efficient payments for remote workers.

“Even though the road will be a long one, the sector is hopeful that these Congressional meetings will make a difference in the long term,” Reyes said. “While this continues, players in the industry such as ourselves must continue to act with clients’ best interests at heart and aim to become recognized and regulated in other jurisdictions while the US decides how it will move forward.”

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