U.S. Congress Hearings: Key Points
On July 18th two separate U.S. Congress hearings on digital assets and cryptocurrencies were held.
The House Agriculture Committee Chairman, Michael Conaway, spoke first. Here is what he said about digital assets’ potential and regulation: “Properly regulated markets promote innovation and foster economic growth, and I don’t believe that will be any different with digital assets. Of course, 'proper regulation' does not mean 'intrusive regulation'. It means, regulation appropriate to the nature of the activities and the participants, and in some cases, it might even mean no regulation at all.”
The Chairman and Ranking Member, Collin C. Peterson, identified four main goals:
1. Promoting a Safe, Efficient, and Transparent Tokens Market
2. Proper Regulation, Doesn’t Always Mean Intrusive Regulation
3. Asking the Right Questions
• How do we tell if a token is a security?
• Are current laws appropriate to apply?
4. Ensuring Enough Oversight to Help the Space Grow Responsibly
The Law Professor at Washington and Lee University School of Law, Joshua Fairfield, emphasized that in order to better understand blockchain technology, it’s important to observe the many communities that have formed so we are able to see its potential.
He claimed that blockchain can be implemented in many ways. Here are some examples:
1. Collaborative communities of artists;
2. New forms of corporations;
3. Fast and low-cost check settlement;
4. Digitization of securities;
5. Open and low cost electronic mortgage and secure transactions filing systems;
6. Secure international remittances; and
7. Voting systems
Amber Baldet, CEO and Co-Founder of Clovyr, focused on the importance in balancing the value of blockchain technology with consumer protection and national security. “In achieving the balance of Blockchain, we must respect individuals constitutionally protected rights” — she noted.
Baldet believes that money is currently the killer mobile application for the blockchain. Why?
1. Peer-To-Peer (P2P) Payments
Similar to email, which has served the cornerstone for how we communicate online, P2P payments will continue to expand into our professional and personal daily lives.
2. Digital Bearer Assets
We are moving away from traditional bearer instruments, which provides the owner of the document(s) with the right of ownership and title to the underlying property, and towards unique digital bearer assets.
Why venture capitalists can benefit?
Scott Kupor, the Managing Partner at Andreessen Horowitz Capital Management, expressed his opinion on this topic: “Crypto networks offer a new way to build digital services like any internet application that may exist today, such as ridesharing applications and social media applications”.
To prove his words he made some points:
#1 –Look to Historical Precedent
According to Kupor, the success of community based networks can be traced back to two major movements—open source and open protocols.
#2 –Avoiding Platform Risk
According to Kupor, many startups fail because they rely on “platform risk”, , where they are attempting to build off other platforms that are governed by central corporations. Decentralization can easily solve the problem.
#3 –Tokens Are the Glue Binding Community Members Together
Tokens didn’t exist in prior generations, allowing for a direct financial incentive for community members to develop and govern their networks appropriately.
Positive attitude to changes
Daniel Gorfine, the Chief Innovation and Director of the CFTC, emphasized the need for us to continue studying, learning, and keeping pace with change.
Financial sector transformation
The former CFTC chair, Gary Gensler, stated that the blockchain has a real potential to transform the world of finance for these reasons:
1. Lowers costs and risks in the financial sector
2. The number of illegal activities decreases, financial sector stabilizes
3. Cryptocurrencies can replace financial regulators. Human factor won’t be a relevant problem anymore
4. The ICO market is ripe with scams and frauds, so it should be regulated
The Congress warmly accepted cryptocurrencies and let’s hope, it will be the same trend in the future.
Here's a link to the video of the full hearings: https://www.youtube.com/watch?v=_O9s4fuzvbQ