U.S. Senate Poised for a Debate On Crypto Regulations

Cryptocurrencies and blockchain technology are at the forefront of the government’s attention once again, although this could bring a radical change to the industry. 

According to an official announcement, it has been confirmed that the United States Senate Committee on Banking, Housing, and Urban Development will be holding a debate on the prospect of issuing a regulatory framework for the cryptocurrency and blockchain sectors.

The debate is set to hold on July 30, with planned attendees including Jeremy Allaire, co-founder of payment processor and crypto firm Circle (a representative of the Blockchain Association); Rebecca Nelson, an International Trade expert; and Mehrsa Baradaran, a Professor of Law from the Irvine School of Law at the University of California.

The debate is coming at a time when the intersections between the crypto industry and the American government have become more apparent than ever. While many have called for the regulation of cryptocurrencies along with operators like cryptocurrency exchanges in the past, the government has pretty much kept a lid on regulations.

However, Washington can only ignore crypto for so long, and things have now come full circle. Thanks to the entrance of Facebook into the crypto industry, lawmakers have been forced to interact with the industry and so far, they don’t like the crypto in front of them. 

Lawmakers had their feathers rattled when Libra was announced, with several of them expressing concerns over the company and it’s past with security and handling customer privacy.  However, if there‘s one thing that can be taken from the Facebook debacle, it’s that lawmakers aren’t disillusioned with crypto assets. Their problem is with Facebook itself. 

Last week, David Marcus, the guy behind Facebook’s crypto project, appeared before both the Senate and the House of Representatives, and while some asked how Libra would function, the majority of Marcus’ time was spent convincing lawmakers that Libra would be able to respect the privacy and handle users’ information.

Which begs the question; if the idea of Libra was floated by some other company (for instance, Circle or Ripple Labs), would Congress be so concerned? It really is doubtful. Congress seems to be hell-bent on keeping big tech out of the finance industry, as was expressed in the “Keep Big Tech Out of Finance” bill, a proposed legislative amendment which, according to a Reuters report, will fine major tech firms $1 million per day if they choose to issue cryptocurrencies. 

The bill might not be so effective, though. Facebook, for instance, is currently worth $577.63 billion, and a $365 (or 366) million yearly payment seems like a fair price to pay, given how much they stand to gain if Libra moves forward. It‘s even worse if a company like Amazon or Apple chooses to make its foray into crypto. 

For now, the speculations can only continue to swirl. Washington could adopt the bill to banish big tech from the cryptocurrency industry, leaving Bitcoin wallets, hedge funds, exchanges, and other asset custodians to control the industry. They could ban these asset custodians as well, as pointed out in a series of tweets from economist Alex Krueger.