Key Cryptocurrency Takeaways From the Latest U.S Congress Hearing

The latest U.S Congress Hearing took place on Wednesday before the House Agriculture Committee. The hearing was attended by leaders from diverse backgrounds like lawmakers and regulatory authorities, entrepreneurs, engineers and academicians.

While some of the top authorities from government financial bodies took a sting at cryptocurrencies and blockchain, and the ongoing regulatory process, others seemed to have hit a positive tone. Below are some of the key takeaways from yesterday’s congressional hearing and who said what.

• Federal Reserve chairman Jerome Powell that digital currencies are absolutely risky assets. He told the Congress members that "relatively unsophisticated investors see the asset go up in price, and they think: 'This is great; I'll buy this.' In fact, there is no promise of that. There are investor and consumer protection issues as well.”

However, last year in November 2017, when the crypto market was at its peak, Powell had some positive comments on cryptocurrencies. Back then, he said: "in the long, long run, cryptocurrencies and things of that nature could matter,” while also adding that the underlying blockchain technology could be something that "may have significant applications in the wholesale payments part of the economy."

• Rep. Collin Peterson expressed criticism for digital currencies saying that its entire ecosystem  "seems like a Ponzi scheme" and asking "what's behind this?” Gary Gensler, Senior Lecturer at the MIT Sloan School of Management, responded Peterson saying  "there's really nothing behind gold either ... what's behind it is a cultural norm, for thousands of years we liked gold. We do it as a store of value, so bitcoin is a modern form of digital gold. It's a social construct.”

• While addressing the U.S Congress, Gensler also proposed the regulatory authorities of making sensible and quick decisions to ensure that all the innovation taking place in the blockchain and crypto space does not move out of the country. He also expressed concern that the U.S could be left behind other countries in competition.

Amber Baldet also pressed on the need of sensible and moderate regulations saying “the committee can take a more proactive approach to regulation” while supporting the blockchain tech to transform into a global infrastructure.

• Daniel Gorfine, director of the Commodity Futures Trading Commission (CFTC)'s fintech initiative - LabCFTC, said warned against "hasty regulatory pronouncements” and said that this matter needs to be dealt with a thoughtful approach. He said: “We all have the shared goal to bring clarity and certainty to the market but [we] also need to be sure that we are thoughtful in our approach and do not steer or impede the development of this area of innovation. Indeed, while some may seek the immediate establishment of bright lines, the reality is that hasty regulatory pronouncements are likely to miss the mark, have unintended consequences, or fail to capture important nuance regarding the structure of new products or models."
  
  Gorfine said that not all commodities warrant an attention from CFTC. "It's only when we start to see the rise of futures or swaps products built on those commodities that we have kind of direct oversight.” He also added: "It's important that we're not hasty in figuring out what the contours are of applying securities law and then the commodities framework.”

• In a concluding note Chairman Conaway said that “the hearing was very elucidating for them on different issues.”