Washington Deliberates Cryptocurrency With Sights Set on Federal Regulation
Cryptocurrency is a growing industry and a big debate is raging in Washington. The debate has a lot to do with whether or not cryptocurrency is worthy of a federal regulatory framework. However, it is not clear that Congress is ready to enact a law on the subject. Some have suggested that the best course of action is to get the ball rolling on legislation that would protect consumers and investors. While lawmakers have been hesitant to take a definitive stance on the issue, it’s not impossible to imagine Congress putting crypto regulation front and center in the next congressional session.
Cryptocurrency has been around for a decade and its value has skyrocketed by an estimated 500 percent in the past 12 months. However, the debate has been mired in a series of policymaking quagmires. One example is the ongoing turf wars between federal regulators. Another example is the lack of a single regulatory agency that can oversee all of the different types of digital currencies.
It is also worth noting that the White House and the SEC are not exactly in lockstep. According to reports, White House officials have offered their own vision of how to regulate the crypto industry, but they have not been as specific as their counterparts. As such, it’s unclear if the SEC is fully committed to becoming the chief cryptocurrency regulator.
Cryptocurrency is still far from the regulated market that most Americans want. There is some progress made, however, thanks to the efforts of lawmakers on both sides of the aisle. Legislation was passed to create a new digital asset working group in the House, and there are signs that the Senate Agriculture Committee will also have a hand. This group will include industry companies, which could help develop a comprehensive regulatory framework for digital assets.
In the meantime, the stablecoins have been making a splash, with their market value reaching $120 billion in a matter of a few short years. Although they are not regulated, stablecoins promise a level of stability that is appealing to investors. Additionally, the technology is relatively new, meaning that its growth will likely accelerate in the future. But, like many other emerging technologies, the stablecoin industry faces some major questions regarding its regulatory status.
The most significant thing to come out of the FTX collapse was that it led to a new round of debate on how to regulate the digital currency industry. The FTX story changed the way that lawmakers approached the industry. Many of the top executives of the FTX exchange donated large sums of money to campaign committees on both sides of the political aisle.
On Tuesday, FTX’s CEO will testify before a congressional committee and make his virtual homecoming to Washington. A pending bill, dubbed the “Bitcoin laser eyes” bill, could be an important step toward a more robust regulatory framework for the nascent technology.
As for the stablecoins, it is possible that the FTX debacle has sparked the interest of some legislators, who have started to think of them as the next big thing. Stablecoins, which are billed as a one-to-one representation of a particular currency, are a viable solution to the volatility of crypto prices.