The United States House Financial Services Committee Held a hearing Wednesday for lawmakers and a panel of witnesses to discuss cryptocurrency regulation in the United States.
The Oversight and Investigations Subcommittee invited expert witnesses to testify before Congress on the risks and opportunities of blockchain technology.
Representative Brad Sherman (D-MN), a senior member of the House Financial Services Committee, was not interested in the idea of investing in cryptocurrencies to save for retirement:
“Cryptocurrencies are highly volatile, so if one person makes a million dollars and retires at age 45, and nine lose $ 100,000… Coinbase makes money, and a millionaire shows up on TV and says how wonderful it is, and another nine do not retire with dignity, but instead become eligible for Medicaid. “
He also joked that the California lottery would make a better “bet” than blockchain:
“Cryptocurrency is something you can bet on, but if people want animal spirits to take a chance, I’d rather they invest in stock markets to support building American companies, or in the California lottery to support schools in my status. . ”
But Representative Tom Emmer (R-MN), another senior committee member, was more concerned that regulatory interference was preventing Americans from fully benefiting from the crypto venture:
“In recent years, I have been fortunate to meet many great crypto and blockchain innovators. A common refrain during our discussion is that they want to develop their crypto and blockchain ideas right here in the United States. But they don’t because of continued uncertainty with crypto regulation. “
Hard-learned lessons from the 2008 financial crisis seemed to weigh heavily on statements made by witnesses and members of Congress. That year’s subprime mortgage crisis in home loans quickly spread to adjacent financial sectors.
When it did, a myriad of new innovative and unwieldy financial instruments annihilated huge swaths of investors and plunged the entire American economy into a recession.
The structural instabilities and excessive euphoria that characterized the runaway growth of new equity derivatives in this period were exacerbated by massive amounts of leverage.
Recent years have seen the rapid proliferation of startups and technologies to support and expand the capacity, use, exchange, and “bundling” of cryptocurrencies, and the blockchains that support them. Some lawmakers and regulators fear it will be like the run-up to 2008 again.
Efforts to regulate blockchain technology and mitigate the risks involved in trading them as securities are a confusing mosaic as lawmakers strive to understand new technologies and the industry that is building them.
Not all federal legislators are wary of cryptocurrencies. Some even endorse them. In a recent CNBC interview, U.S. Sen. Cynthia Lummis (R-WY) said she hopes to see bitcoin as a normal part of a diversified retirement portfolio to hedge against inflation. And earlier this month, the Republican National Congress Committee began accepting crypto donations for campaign funds.