Yesterday The Senate Banking Committee along with the Securities and Exchange Commission issued testimony on possible upcoming regulation that might take place for the Cryptocurrency industry.
What’s interesting is that the sentiment of the hearing was in many ways a positive outlook for Cryptos going forward.
On a question of the intrinsic value of cryptocurrency:
Giancarlo [Christopher Giancarlo, the Commodity Futures Trading Commission Chairman] defended Bitcoin’s value, explaining the process of mining and how it correlates with price (or sometimes breaks from that correlation, as economists he cited have suggested).
Jay Clayton, Securities and Exchange Commission Chairman, seemed less enthusiastic on Crypto’s value. at least in the short-term:
There are a lot of smart people who think there’s something to the value of cryptocurrency and the international exchange and I’m not seeing those benefits manifesting themselves in the market yet. I look at this from the perspective of Main Street investors and they should understand that.
Both have concerns that cryptocurrency is unregulated and that this needs to change:
“To be clear, the CFTC does not regulate the dozens of virtual currency trading platforms here and abroad,” Giancarlo said, clarifying that the CFTC can’t require cyber protections, platform safeguards and other things that consumers might expect from traditional securities.
Clayton called for an interagency coordinated plan among states, federal regulators and the SEC and CFTC to address consumer naiveté over unregulated trading platforms.
As I’ve said before…regulation IS coming…and is needed:
When Senator Mark Warner, who expressed more familiarity with the area than most of his peers, criticized the patchwork nature of regulation that allowed Bitcoin futures while still blocking ETFs, calling for a more “coordinated effort” among regulatory bodies, both witnesses were quick to agree. In doing so Warner offered a bullish vision. “The potential writ large amongst crypto assets and the underlying blockchain could be as transformational as wireless was years ago. I think we’re going to need a much more coordinated effort,” Warner said.
I think it’s becoming obvious to the financial world that Cryptocurrency (and the Blockchain) isn’t going anywhere. It will be interesting to see how this plays out in the coming year and beyond.
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