By
Steve Muchoki
April 19th, 2024
The Senate Banking Committee will hear arguments from Circle CEO and Co-founder, Jeremy Allaire on the digital currencies and the blockchain industry. Allaire hopes that a new regulatory framework will be adopted for the sector.
Jeremy Allaire, the CEO and co-founder of Circle will represent the Blockchain Association before the U.S. Senate Committee on Banking, Housing, and Urban Affairs today, July 30th.
Titled “Examining Regulatory Frameworks for Digital Currencies and Blockchain”, the hearing will discuss a number of issues as they relate to the blockchain industry and its current and proposed regulatory structure. Allaire will be joined by Congressional Research Service specialist on finance and international trade, Rebecca Nelson; and also Mehra Baradaran, a University of California – Irvine School of Law professor.
Let’s Change the Laws
Allaire is a very vocal blockchain proponent and he’s known to advocate from time to time about the need for the regulatory framework surrounding the industry to be changed because “applying laws written in the 20th century to technologies created in the 21st” should be stopped.
On Monday the 29th, the Senate Banking Committee published a 13-page testimony from Allaire suggesting that the Circle CEO was ready to discuss specific issues regarding the sector and the possibility of preferring solutions that should eventually be passed as law.
Some of the issues touched on in the testimony include security and privacy of data and information, identity protection and the different methods to regulation whether within the country or globally. Basically, Allaire is hoping that Congress will form new policies that are specifically designed for digital assets and discontinue the use of any blanket laws or regulations.
“Congress should adopt national policies that define and establish digital assets as a new asset class and develop appropriate rules and exemptions for digital assets. This will require legislation that likely changes our existing commodities, securities, and banking laws, among others. Such policies should have the effect of enabling rapid technological progress within the context of sound risk management.”
Can Digital Currencies Create Financial Inclusion?
The Senate Banking Committee also published testimonies from the other participants. Nelson’s testimony seemed to turn the spotlight on regulatory framework as should be applicable globally. According to her, there definitely is a future for digital currencies and with the growing interest and investment the sector that has been recording in recent times, wider adoption of digital currencies is almost inevitable.
Nelson believes that this will also be propagated by the fact there are large firms (Facebook for example) entering the sector continuously. She also mentions interest from many central banks as they try to create their own Central Bank Digital Currencies (CBDC).
For Baradaran however, there is a call to solve problems currently plaguing the banking system but cryptocurrencies might not be the best option:
“While I share many of the cryptocurrency industry’s concerns with respect to failures of the banking industry, I do not believe cryptocurrency is the best solution to the problems of financial inclusion and equity in banking.”
Baradaran believes that cryptocurrencies want to take over where public institutions have failed and fully allowing this could mean that there is no longer any hope for public institutions.