This Tuesday, a hearing was held by the U.S Senate Committee on the Banking, Housing, and Urban Affairs in which the regulation of cryptocurrency was addressed as well.
In this event, the heads of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) were seen to be testifying on various topics and issues which included price volatility, market oversight, and the regulatory issue about ICOs.
It quite surprising to see the amount of information which both the committee members and the regulators seemed to have on cryptocurrency which made this whole event quite hopeful and the crypto community was left feeling a little optimistic about it for the future.
Both the agencies have admitted that there are more resources required to keep a close eye on the quickly expanding crypto industry. Although this may create fear in the community, more resources will result in better more thoughtful regulation, which is important for useful guidance.
There’s Room for Clarity
Apart from being optimistic, a few market observers realized that the hearing showed us that we need more transparency and clarity on the regulatory side. This was admitted by both the agencies’ chairs and suggested a probable action from the U.S Congress.
The need for clearer jurisdiction lines was well highlighted in the meeting. Also, it could be easily seen that even though SEC is coordinating with Federal Reserve and CFTC, it isn’t nearly enough and that somebody needs to handle it at the federal level.
If this happens, then Bitcoin exchanges might end up suffering because they have spent the previous few years in ensuring that they are compliant with the FinCen and state’s licensed money transmitters.
Cryptocurrency is Here to Stay
The hearing has proved that the regulators and the lawmakers have agreed that cryptocurrency is here to stay, regardless of the risks associated with it. Giancarlo and Clayton commented on the other possible uses of the crypto technology and the CFTC head really won over the heart of the crypto community by saying that without Bitcoin, there wouldn’t be any distributed ledger technology to utilize.
It could be seen that many senators and regulators are worried about fraud and volatile markets in cryptocurrency but they also understand that this is a big transformational moment.
So What happens next?
However, one big question is regarding the action that is going to be taken by both the Congress and the regulators. It was observed in the event that agencies might reach out to the lawmakers for more oversight but Congress might take the first action on its own.
The patchwork of various rules in cryptocurrency was addressed and it was highlighted that a few additional steps might be required in this section.
It is an encouraging sign that CFTC and SEC are collaborating together so as to address this patchwork of regulation which is currently restricting growth and consumer’s choice. It will also provide the U.S to maintain its leadership in this technological innovation.
It is quite likely that both the agencies might receive some pressure to better their enforcement efforts against frauds in the cryptocurrency space.