Crypto regulation could face a major overhaul as House Republicans take steps to overhaul oversight of the emerging market asset class.
The House Financial Services Committee has been drafting a number of smaller bills in recent months, but the committee intends to do so, according to Rep. French Hill, who chairs the Subcommittee on Digital Assets, Fintech and Inclusion address broader problems in the following months.
About crypto regulation and crackdowns
On Thursday, Paul Grewal, Coinbase's chief legal officer, testified at a hearing. In his prepared remarkshe pushed for the introduction of crypto regulation that would both support the sector and protect consumers.
“We need policymakers to work together to develop a comprehensive framework that provides avenues for clients to access digital asset commodities and digital asset securities in the United States.”
There is little information on what the committee intends to propose, but it comes as federal banks and market officials step up their enforcement of traditional financial standards in the crypto industry.
The companies dealing with digital assets are pushing Congress to create a unique set of rules for cryptocurrencies, similar to what has been done in various regions such as the European Union.
Urgent need for crypto oversight
Despite Republican calls for crypto regulation, several proposals on the committee are pro-industry, suggesting Grewal's recommendations will be heeded.
The need for government and regulatory oversight of cryptocurrency stems from several concerns related to the decentralized and often anonymous nature of digital currency.
Without oversight, experts fear that cryptocurrencies could be used for illegal activities such as money laundering, terrorist financing and tax evasion.
Additionally, cryptocurrency markets are known to exhibit extreme volatility, with prices fluctuating wildly over short periods of time. This volatility creates risk for investors and could lead to broader economic instability if left unchecked.
Additionally, as cryptocurrency adoption has increased, concerns have arisen about the potential impact on traditional financial systems and monetary policy. Regulators are also concerned about protecting consumers from fraudulent activities and ensuring the stability of the financial system.
Crypto total market cap currently at $887 billion on the daily chart | Chart: TradingView.com
Proponents of crypto regulation argue that proper regulation can help deter illegal activity, protect consumers, and support the long-term growth and stability of the cryptocurrency market.
Some of the measures aim to show Support for the Congress on Blockchain Technology and Digital Assetswhile other blockchain developers would exempt from certain reporting and licensing requirements or reduce the amount of tax information crypto companies would have to provide.
Likewise, Federal Reserve Chairman Jerome Powell said this week that House should speak during his testimony on Capitol Hill.
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