The Relationship Between Cryptocurrency and US Congress: A Look at the Wednesday Hearings

An angled view of the US Capitol Building at noon with images of Crypto Coins fading in the background

For most of the past week, the Internet was rife with articles about the upcoming Congressional hearings regarding crypto regulations in the United States.

2021 Highlights

Cryptocurrencies have been a topic of discussion in the Political Arena as well as the Stock Market. Throughout 2021, virtual currencies were one of the hottest topics of the year, followed very closely by meme stocks. Not surprisingly, this also included a plethora of crypto scams. The most remarkable of this was perhaps the $SQUID token based on the hit Netflix series, Squid Game, which turned out to be the front of a pump-and-dump scheme.

At present, the Cryptocurrency market has a worth of an eye-popping 2 trillion USD. Though criticized for being volatile and risky, Crypto has also been known to be accessible, and less time-consuming in the field of financial transactions. On November 8, 2021, the price of Bitcoin (BTC) hit an all-time high of $67,566.83.

There are plenty of positives to go about as well. Particularly, a congress hearing regarding planned Crypto regulations this Wednesday, December 9, 2021.

Wednesday Hearings

The hearing was led by Rep. Maxine Waters (D-CA), Chairperson of the Financial Services Committee. The Committee’s official site divulged the list of the following six witnesses for the hearing:

  • Jeremy Allaire, Co-founder/Chairman/CEO of Circle SpA (BIT: CIRC)
  • Samuel Bankman-Fried, CEO/Founder of FTX
  • Brian P. Brooks, CEO of Bitfury Group
  • Charles Cascarilla, CEO/Co-Founder at Paxos Trust Company.
  • Denelle Dixon, CEO/Exec. Director at Stellar Development Foundation.
  • Alesia Jeanne Haas, CEO at Coinbase Inc. and CFO at Coinbase Global Inc.

The hybrid hearing lasted for nearly five hours and involved questioning by around 40 lawmakers present. In a live transcript, Rep. Jake Auchincloss, Vice Chairman of the Financials Committee, was pro-crypto. Rep. Rashida Tlaib (D-MI) inquired about the energy consumption that Bitcoin in particular gulps down. Dixon responded by saying, “We all need to focus on minimizing the energy usage”.

Reps. Sylvia Garcia (D-Tx) and Alma Adams (D-NC) still proceeded with caution and asked all the CEOs present to provide their user base data. The CEOs unanimously agreed. One consistent concern was that cryptos could chip away the U.S. Dollar. This was pointed well out by Rep. Brad Sherman (D-CA) who said, “Cryptocurrency is an incredibly volatile investment that aspires to be a currency that might displace or at least compete with the Dollar.” He went on to say, “Bitcoin could be displaced by Ether, which could be displaced by Doge which could be displaced by Hamster Coin, and then there's CobraCoin. What could Mongoose Coin do to CryptoCoin?”

By the next day, crypto named Mongoose Coin really did hit multiple platforms. One version, named $MONG, struck an M. Cap. of roughly $18.7 Million with just 3,000 holders.

Of course, Cryptos have also had their fair share of supporters in Congress. These have included more Republicans than Democrats. One example is Rep. Cynthia Lummis, who purchased $BTC in August’21 and whose home state, Wyoming, is America’s crypto capital. In addition, Lummis recently urged her party to eliminate Jay Powell from the list of nominees for the Federal Reserve Chairman’s seat. This was on the basis of Powell’s crypto policies.

What to Expect

Currently, $BTC is hovering in the range of 48,000 to 50,000 USD. Multiple factors have contributed to this fall: SEC Chairman Gary Gensler’s words about regulating crypto and US President Joe Biden signing of an Infrastructure Bill that contains legislations for Crypto brokers. Another reason could be the news flashes about the coronavirus’s latest variant, Omicron, which has sent the world and the still-recovering economy into further mystery.

In comparison to past hearings, which mostly focused on scrutinizing Bitcoin due to the criminal risks involved, the Wednesday hearing went forth with curiosity and encouragement. “I think it went really, really well,” Circle CEO Jeremy Allaire said after the hearing. “It was very comprehensive, not contentious.” A noteworthy fact that remains is that the US continues to shrink from accepting crypto but other countries, including Canada and Australia, are becoming fluent in Crypto.

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