House committee reviews crypto risks and regulations when heard

The U.S. House of Representatives Financial Services Committee held a hearing for lawmakers and a witness commission on Wednesday to discuss cryptocurrency regulation in the United States.

The Oversight and Investigation Subcommittee invited experts to testify before Congress about the risks and opportunities of blockchain technology.

Rep. Brad Sherman (D-MN), a senior member of the House Financial Services Committee, isn’t keen on the idea of ​​investing in crypto to save for retirement:

“Cryptocurrency is very volatile. So if one person makes a million dollars and retires at 45 and nine lose $ 100,000 – – Coinbase makes money and a millionaire goes on TV and says that’s great and nine other people don’t retire with dignity, but instead Eligibility for Medicaid. “

He also quipped that the California lottery would make a better “bet” than blockchain:

“Cryptocurrency is something to bet on, but if people want to be adventurous, I want them to invest in the stock market to help build American companies or the California lottery. “

However, Rep. Tom Emmer (R-MN), another senior member of the committee, is more concerned that regulatory interference is preventing Americans from fully benefiting from crypto-entrepreneurship:

“In the past few years, I’ve been fortunate to meet a lot of great crypto and blockchain innovators. A common refrain in our discussion was that they wanted to develop their crypto and blockchain ideas right here in the United States. But they’re not because of the ongoing uncertainty surrounding crypto regulation. “

The hard lessons of the 2008 financial crisis seem to be hidden in testimony from witnesses and congressmen. This year’s subprime mortgage crisis in the real estate lending sector quickly spread to neighboring financial sectors.

Coincidentally, a flood of innovative and unwieldy new financial instruments wiped out a huge number of investors and drove the entire US economy into recession.

The structural uncertainties and exuberance that characterized the dizzying growth of new equity derivatives during this period were compounded by the high leverage.

In recent years there has been a rapid proliferation of new projects and technologies to support and expand the ability, use, exchange, and “storage” of cryptocurrencies – and the blockchains that maintain them. Some lawmakers and regulators fear it happened again in 2008.

Efforts to regulate blockchain technology and reduce the risks of trading securities are a confusing patchwork as lawmakers seek to understand new technologies and the industry build them.

Not all federal legislators are suspicious of cryptocurrencies. Some even advocate it. In a recent CNBC interview, U.S. Senator Cynthia Lummis (R-WY) said she hopes to see bitcoin as a normal part of a diversified bond portfolio to protect against inflation. And earlier this month, the National Republican Congressional Committee began accepting crypto donations for campaign funds.