Following the May release of the CLARITY Act, the House of Representative’s market structure bill to establish a cryptocurrency regulatory framework, the Senate Banking Committee held a hearing with industry leaders testifying Wednesday as its prepares to craft it own framework for digital assets.
Here are six takeaways from the hearing.
America is behind in establishing a crypto regulatory framework.
Countries like the U.K., Japan and Singapore are implementing bespoke digital asset frameworks, as the U.S. has fallen behind, Blockchain Association CEO Summer Mersinger told the Senate panel.
“[W]e must view establishing a federal regulatory framework as a national priority,” Mersinger said. “Digital assets and blockchain technology are revolutionizing financial services, supply chains, and digital identity. The country that leads on this policy will set global norms and unlock enormous economic and strategic benefits. The United States should be that leader, and this is our moment to lead.”
Existing laws tailored to traditional finance don’t quite fit crypto.
Mersinger noted that regulating the industry with the laws already in place has “created ambiguity,” thus limiting innovation and pushing changemakers to other jurisdictions with clearer crypto rules.
She also noted that traditional bank regulations aren’t a good fit for digital assets or the blockchain because those existing regulations as meant for centralized intermediaries – “and that’s not what we’re dealing with here.”
“Without thoughtfully crafted rules for the road, we risk stifling innovation, leaving American consumers without proper safeguards and protections, and ceding leadership in a sector that will define the future of global finance and technology,” she said.