House memo details Congress’ priorities ahead of crypto CEO hearing

House memo details Congress’ priorities ahead of crypto CEO hearing

A memorandum was released by the United States House Committee on Financial Services outlining the points to be discussed during the hybrid hearing on digital asset that will take place on Wednesday, at 10:00 ET.

The memo addressed the Financial Services Committee and confirmed that one panel will be devoted to six executives of the crypto community as witnesses. This includes Circle’s Jeremy Allaire and FTX’s Sam Bankman–Fried, Bitfury Group’s Brian Brooks, Paxos’ Charles Cascarilla, Stellar’s Denelle Dixon, Coinbase’s Alesia Háas.

The hearing is entitled “Digital Assets & the Future of Finance: Understanding Challenges and Benefits of Fintech Innovation in the United States.” It will discuss four key topics: stablecoin offerings, crypto exchanges, regulation concerns regarding digital assets, and federal regulatory responses.

According to the brief, “This hearing will look at some of the new products, services, and role of major cryptocurrency market participants in facilitating investments and related transactions in cryptocurrency, the growth and stability of stablecoins, and the regulatory landscape governing these products and services.”

BREAKING !! Chairwoman @RepMaxineWaters Announces #Cryptocurrency CEOs to Testify at Full Committee Hearing | https://t.co/6IBi6jGNAC pic.twitter.com/r4kJqjmhqu
December 1, 2021 — U.S. House Committee on Financial Services. (@FSCDems).

The memo discusses the importance of crypto exchanges as an entry point for investors. However, the hearing will also address decentralized finance due to its potential to “replicate or replace traditional delivery of financial services like loans, asset trading and insurance.”

Additionally, the document discusses the differences in operating structures and reserve compositions for stablecoins compared with fiat currency.

“Cryptocurrency market have no centralized regulatory structure. This makes investments in digital assets vulnerable to manipulation, fraud, and abuse.” The digital assets and associated service providers could present money laundering, terrorist financing and sanctions evasion as well as other illicit finance risks.

Recognizing the rise in cryptocurrencies, Congress plans to adopt a clear position on central bank digital currency (CBDC). This will be based on the Federal Reserve’s ongoing study to “examine potential benefits and risks of CBDCs as well as its impact on U.S. domestic payment system.”

Circle’s Allaire made a statement on Tuesday in advance of the hearing. It stated:

“In an internet world where money is a central feature, the U.S. should promote the use the dollar as the primary currency and leverage it as a source for national economic competitiveness and security.

Circle, Allaire’s company, is the only issuer of USD Coin (USDC), a dollar-backed stablecoin USD Coin. He suggested that the U.S. government could make widespread use of the stablecoin through dollar-denominated reserve. He said, “Policy frameworks must support an open and competive playing field, and permit new technologies to flourish.”

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