The cryptocurrency industry is hotly debated these days and discussions about the entire industry are booming in many different countries. On June 15, 2021, the Fintech Task Force of the House Financial Services Committee held four major hearings on cryptocurrencies. It appears that Congress is taking a closer look at cryptocurrencies. The current bull market in cryptocurrencies, whether bitcoin is terrible for investors and excellent for criminals, and what politicians can or should do about it, will be the subject of four hearings in June. To be clear, the hearings have been held for many years. What is new is that we are starting to focus on particular topics and instances.
Senator Elizabeth Warren, a former presidential candidate and longtime advocate of consumer protection, conducted a hearing of the Senate subcommittee on cryptocurrencies last week. On paper, the meeting was supposed to be about central bank digital currencies , but the actual focus turned out to be bitcoin. It wasn’t a good hearing for bitcoin either.
Warren criticized bitcoin’s price volatility as well as some of consumer concerns about digital assets and the amount of energy needed to safeguard the bitcoin network. These are not brand matters. However, last week’s hearing as well as three others scheduled for this month imply that we are approaching a new level of regulatory awareness: the important events in the timeline are:
- Regulators are aware but not particularly concerned about bitcoin’s debut and we’ve seen some guidance from FinCEN’s Internal Revenue Service on how it will be managed.
- The ICO boom occurs and the securities and exchange commission reacts with the DAO report and subsequent enforcement proceedings.
- More and more attention is being paid to stablecoins and related regulations.
- The coronavirus outbreak erupts around the same time, and authorities begin to see central bank digital currencies as a government-regulated and controllable alternative to stablecoins.
- When it comes to platforms and regulation, this is also a critical topic of discussion. The regulations are not that strict when it comes to trading platforms, however, in most states, betting and in this case crypto betting in the US was under a lot of pressure. However, Senate hearings highlighted dozens of cases where lawsuits were unsecured and more and more people were involved in the betting process. These actions are one of the most important topics of discussion in the current Congressional hearing.
Probability and ends
There has been a lot of noise lately. It’s happening all over the world, not just in the US, and it’s been a bit upsetting. What’s more interesting is that all the measures we’ve seen so far indicate that politicians perceive cryptocurrencies as something that can and should be regulated, but not as something that can or should be outlawed. There are some important recent developments in the industry:
- FinCEN announced that, as part of its regulatory goals, it will complete its anti-money laundering and regulation activities related to crypto by the end of the year. Dozens of swap applications are in the balance without the proper regulation.
- Following a request from El Salvador, the Central American Bank for Economic Integration will create a technical committee to assist the Central American country in figuring out how to enforce its bitcoin laws.
- The central bank of Argentina is examining a number of fintech companies that are allegedly providing illegal services related to cryptocurrencies. The identities of the companies were not disclosed by the bank.
- South Africa wants to tighten the regulation of cryptocurrency companies and the digital asset sector in general, with its financial authority proposing anti-money laundering regulations and other measures to do so.
- Having previously approached the idea of using bitcoin as a financial instrument, Iranian President Hassan Rouhani says he wants to regulate cryptocurrencies as soon as possible.
Emmer and the Congressional Blockchain Group are demanding that the IRS review its guidelines on charitable donations of cryptocurrencies. Tom Emmer wrote to the US taxman again, this time asking for specific instructions on digital assets. After passing in the State Senate, a crypto mining law in New York died in the Assembly. A measure in the New York state assembly that would have essentially placed a ban on crypto mining operations is dead.