Cryptocurrency execs testify before U.S. Congress, warn 'onerous' regulation may have a 'chilling' industry effect
The first ever Congressional hearing of crypto exchange execs titled "Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States" is being held right now, and Coinbase CEO Alesia Haas warned U.S. Congress before the testimony about the "chilling" effect of regulation. In a prepared statement, Ms. Haas advocates for clear crypto regulation and taxation rules that won't push digital asset innovation abroad or underground, and will take into account the unique nature of the blockchain-based ledger:
Without tailored legislative solutions that are openly debated with public participation, the United States risks unnecessarily onerous and chilling laws and regulations. This could effectively push crypto activity underground or to offshore exchanges that have little or no compliance programs...
Coinbase agrees with the goal of the IRS and Congress to ensure individuals and businesses pay the taxes they owe. Central to achieving this goal is recognizing the unique nature of crypto technology – and creating parity with other asset classes. Coinbase has developed a number of resources to help our customers meet their tax obligations, including a tax resource center and partnerships with both TurboTax and Cointracker to help customers accurately calculate their taxes owed.
Holders of digital assets want to pay their taxes, and centralized crypto intermediaries like Coinbase want clear rules and guidance to help them do that. Digital asset platforms should be subject to the same third-party reporting rules on our customers’ gains and losses that brokerage firms, like Fidelity and Charles Schwab, operate under today.
Another high-profile crypto exchange exec that testifies before Congress today, the CEO of Circle Jeremy Allaire, said in his prepared statement that "policy frameworks need to support an open and competitive playing field, and allow new technologies to flourish," while Denelle Dixon, head of the Stellar Development Foundation, added:
We’ve started to see how innovation can be hampered in other parts of the world when regulators and lawmakers react quickly, and arguably prematurely, to address perceived risks around cryptocurrency...
Let’s not hamper innovation here in the United States which would have a real impact on the ability to make full use of this technology elsewhere. Let’s learn from the past, let’s take down the walled gardens, let’s get rid of the friction, and let’s create an open loop for innovation here in the U.S...
As we walk away from this hearing, I hope that we can all agree that crypto and stablecoin shouldn’t be buzzwords, thrown around to incite fear of the unknown. I urge you all to look at this industry and technology beyond the narrow lens of applications that often dominate the news.
Maxine Waters (D-CA), the Chairwoman of the House Committee on Financial Services who scheduled today's cryptocurrency regulation Congressional hearing, said that she is worried "cryptocurrency markets have no overarching or centralized regulatory framework, leading investments in the digital assets space vulnerable to fraud, manipulation and abuse."
Some representatives like Alexandria Ocasio-Cortez used the crypto execs testimony to clarify terminology like stablecoin and wondered how innovative the new digital asset exchange system is in reality, while others like Republican representative Patrick McHenry asked their colleagues for regulatory understanding in order to make the U.S. a leader in the field. The first Congressional testimony of crypto platform execs is still ongoing, and you can watch it below as it is sure to generate more cryptocurrency regulation and taxation news.