Cryptocurrencies Embraced by US Regulators
Cryptocurrencies were the topic of a hearing on 6 Feb before the Senate Banking Committee. Securities and Exchange Commission Chairman Jay Clayton and Commodity Futures Trading Commission Chairman Christopher Giancarlo opened up about what the near-term U.S. regulatory fate of cryptocurrency might look like. In a week of plunging prices and bad news, the hearing struck a tone that coin watchers could reasonably interpret as surprisingly optimistic.
The testimony drew a helpful distinction among three pillars of the virtual currency ecosystem (for lack of a better unifying term): cryptocurrencies, “a replacement for dollars;” ICOs, “like a stock offering;” and distributed ledger technologies, or the technical framework generally known as blockchain.
Over the course of the open hearing, Clayton and Giancarlo traded testimony over their ideas about what can be regulated, what should be regulated and how, while offering a broader outlook on the long-term future of virtual currency markets and blockchain tech.
Throughout the hearing, on the SEC side, Clayton focused on ICO fraud concerns, while the CFTC’s Giancarlo came across as genuinely enthusiastic and curious about the emerging market.
On the topic of advantages of a Bitcoin futures market:
“The CFTC can now obtain trading data and analyze it for fraud and manipulation,” Giancarlo said.
“…With Bitcoin futures we’re now having visibility into underlying markets and spot markets that we would not otherwise have.”
The CFTC and SEC plans appeared to be overwhelmingly focused on protecting consumers from threats like rampant ICO “fraudsters” and unsafe exchanges rather than discouraging growth. For anyone interested in the long-term health and viability of virtual currencies, that should come as good news.
Watch the 15:08 video below to hear Bix Weir summarize the hearing on 6 Feb before the Senate Banking Committee. In this video, he also explains the significance of the new head of the Fed being an expert on bank failures.