WASHINGTON—The chief government officers of half a dozen cryptocurrency companies are set to look earlier than Congress on Wednesday, as lawmakers and regulators wrestle with the right way to deliver the greater than $2 trillion market beneath authorities oversight.
The Home Monetary Companies Committee, led by
Rep. Maxine Waters
(D., Calif.), referred to as the listening to in hopes of bettering lawmakers’ understanding of crypto property and the way the sector suits into current rules.
The CEOs of stablecoin issuer Circle Web Monetary Ltd., crypto exchanges
Coinbase International Inc.
and FTX Buying and selling Ltd., bitcoin-mining agency Bitfury Group Ltd., cryptocurrency-payments system Stellar Growth Basis and blockchain agency Paxos Belief Co. are scheduled to testify from 10 a.m. ET.
In a memo asserting the listening to, Democratic staffers from the committee highlighted considerations about investor and shopper protections and market integrity arising from crypto.
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The executives are anticipated to tout the potential upsides of crypto and blockchain know-how whereas taking part in down the dangers. They’re additionally prone to argue that cryptocurrencies don’t match neatly throughout the current construction of U.S. monetary rules and that lawmakers ought to think about writing tailored laws for his or her trade.
Crypto supporters say that the know-how can facilitate sooner and cheaper transactions than conventional fee networks, and that it has the potential to foster innovation and monetary inclusion. Coverage makers fear that the speedy progress of crypto markets poses a risk to monetary stability, that the sector is rife with fraud, and that criminals are utilizing cryptocurrencies to evade taxes and circumvent anti-money-laundering legal guidelines.
Oversight of crypto markets is spotty within the U.S., the place monetary regulation is break up amongst federal and state companies.
The Securities and Change Fee lately has shut down dozens of so-called preliminary coin choices for promoting unregistered securities. Below Chairman
Gary Gensler,
who was nominated this yr by President
Biden,
the company has sought to influence buying and selling and lending platforms, comparable to Coinbase, to register as securities exchanges.
However the two largest cryptocurrencies by market cap—bitcoin and ethereum—are thought of by many consultants to be commodities moderately than securities, that means they doubtless fall exterior the SEC’s jurisdiction. Whereas the Commodity Futures Buying and selling Fee regulates derivatives markets for commodities, its authority is extra restricted in relation to the underlying devices.
“There are gaps in our system,” Mr. Gensler stated Tuesday at The Wall Avenue Journal CEO Council Summit.
Whereas congressional hearings are sometimes uncomfortable for company figures, not less than among the crypto executives slated to look Wednesday expressed enthusiasm in regards to the alternative to testify on Capitol Hill.
Stellar Growth Basis CEO
Denelle Dixon
stated in a Twitter post last week that she is “honored to testify” and thanked Ms. Waters for inviting her.
Bitfury CEO
Brian Brooks,
who served as performing comptroller of the forex throughout the Trump administration, just lately stated on CNBC that he hopes the listening to will assist “resolve among the contradictions in U.S. crypto coverage.”
He stated he plans to argue that bitcoin mining—which makes use of huge quantities of electrical energy and has led to the reopening of some closed fossil-fuel energy crops—“will be a part of the answer for an environmentally sustainable future.”
Write to Paul Kiernan at paul.kiernan@wsj.com
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