The session entitled “Examining Regulatory Frameworks for Digital Currencies and Blockchain” at the US Congress has just ended, it involved the CEO of Circle, Jeremy Allaire, Rebecca M. Nelson, a specialist in international trading and finance, and Mehrsa Baradaran, professor of law at the Californian University “Irvine School of Law”.
The session focused on the issue of regulation within the crypto sector, with opening remarks concerning the previous session on Libra and the Facebook “cryptocurrency”, recalling the various doubts that were generated by the project. In general, all the Senators involved expressed their concern about the Libra project.
However, speaking of blockchain, Mike Crapo also explained how aware he is of the fact that blockchain technology and cryptocurrencies are inevitable, reiterating that for him it should be the US government to lead the sector. It is for this reason, explained Crapo, that the US Congress is organising these sessions, to obtain more information on the different cryptocurrencies and to understand how to create a framework for possible regulation.
Senator Sherrod Brown then took the floor and began the session stressing that they cannot trust Libra: every project always has negative aspects and that, while they could be advantageous, there are still rules to follow, which is why the US Congress wants some clarity.
After that, it was the turn of Circle’s CEO, who talked about his background in the financial sector, which spans more than 25 years. Circle was founded in 2017, explained Allaire, with the aim of sharing and simplifying the entry into the crypto world to users in order to address all the disadvantages and problems of the traditional banking system.
Allaire thus emphasised the various frauds and funds of dubious origin, praising the blockchain as the future of the banking world. In addition, Circle’s CEO expressed his concerns about the crypto market and how his company is complying with all of US regulations.
Professor Baradaran also took the floor during this session of the US Congress, stating that the blockchain is a great opportunity to ensure better security and stressed that the current traditional financial system involves too many costs for the end-user: if the current system can not be replaced immediately, explained Baradaran, it is still possible to integrate this technology to have better management of the entire industry.
In addition, Baradaran spoke about the various reasons that led to the 2008 crisis and referred to Libra by saying that, even if it is pegged 1 to 1 with the dollar, no one could predict what would happen if things went wrong, which is why no one is now able to determine the various negative effects on the entire financial system and the users who would use Libra.
Circle CEO talks about regulation
After these remarks, there were several questions to the CEO of Circle. First, Crapo asked Allaire for his opinion on the future of Bitcoin and how, according to him, it would be possible to achieve good regulation. As a result, Allaire, making a very clear distinction between bitcoin and Libra, explained how, according to him, bitcoin and the other cryptocurrencies should be treated like the other commodities, although with particular attention to their custody and security as they are digital goods.
Then, Senator Cortez Mastoche made her point, explaining that in her opinion blockchain technology will not go out of fashion and that we will have to live with it, so as to be able to regulate its use to avoid problems for investors and not interfere with the American economic system.
Blockchain: an opportunity for America
Senator Van Hollen, in agreement with this statement, explained that America must act quickly to decide on a crypto framework so as not to miss such an important opportunity that is currently costing millions to the American system. The professor confirmed this statement, considering that more and more companies and startups are deciding to move out of America to have a clearer regulation and more opportunities for the sector.