Law Decoded: A different Congress hearing, Dec. 6–13

Law Decoded: A different Congress hearing, Dec. 6–13

The most important regulatory story of the week was the hearing by the United States House Committee on Financial Services that focused solely on crypto. The event’s title, “Digital Assets and the Future of Finance” — conveyed a completely different atmosphere than previous Congressional meetings which were primarily concerned with investor protection or security threats or financial stability.

Many industry experts and participants have expressed positive reactions to the exchange. They asked informed questions and acted like they were trying to understand the new thing, rather than relying on preconceived ideas. Although there were some tired questions about Bitcoin’s environment and Representative Brad Sherman’s anticrypto rants throughout the exchange, the whole thing looked like the constructive dialogue between lawmakers and the digital asset industry that we have been waiting for.

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Hear the industry

Maxine Waters, Chair of the Financial Services Committee, called the hearing. It focused on crypto exchanges and the growth of stablecoin. A number of top crypto CEOs were called to the hearing to represent the crypto industry.

The House discussed a number of important topics, including the crypto-powered decentralization the digital ecosystem. This is a politically beneficial angle at a time when many U.S. legislators are concerned about Web 2.0-era tech giants power grab. Also, regulators’ reluctance of certain crypto investment products being allowed by the U.S. could be seen as a sign of a fragmented regulatory approach. Much attention was also paid to the relationship between the U.S. Dollar’s global role in the digital ecosystem and growing demand for stablecoins.

BIS: Are you afraid of DeFi?

A note on the Bank of International Settlements latest report on decentralized financing is necessary in order to not get carried away by what seems like a win at the Congress floor. The “bank of central banks” did a deep dive into DeFi and came up with some alarmist slogans like “decentralization illusion” as a way to describe it.

BIS analysts are concerned about structural aspects of DeFi landscape. These include liquidity mismatches, and the absence of shock absorbers like banks. According to the authors, the protocol governing DeFi activity poses risks of centralization. This could lead to concentrated power in these systems. These claims are certain to cause a lot of concern, particularly among those who are familiar with the DeFi space.

CBDC Watch

You can see the BIS’ desire for more controlled financial innovation in the news stories about its specialized division, BIS Innovation Hub. It is actively involved in trials of cross-border digital euro-based settlements with the central banks in France and Switzerland. Although the experiment was considered a success, the parties involved stressed that it doesn’t warrant the final issuance of a European CBDC.

Another centralized news about digital currencies is that the Reserve Bank of Australia completed a two year-long investigation and produced a report that highlighted potential for a wholesale central banks digital currency to increase the efficiency of financial markets transactions.

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Amy Jimenez

Amy Jimenez– Services My name is Amy Jimenez, and I am the main writer behind the"" for the ground-breaking and most fragile bits of knowledge into the most recent news in the services sector. I began my voyage of work as an autonomous investment advisor. I had around 4 years of involvement in this field. I am a free soul so; my energy for investigating the world has taken me to the countries over the globe and allowed me to report for a part of the best news affiliations. At present, I am a full-time manager as experienced in the account and began to utilize my capacities.

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