By
Chimamanda U. Martha
April 23rd, 2024
The crypto community is on a wait-and-see mode awaiting regulation hearings by the Senate Banking Committee expected to shape the future of the nascent crypto industry with more regulations introduced.
In the past weeks, regulators from around the world have taken it upon themselves to scrutinize cryptocurrencies. In most case scenarios, they aim to tame the potential powers that the nascent industry holds. The elevated attention came about when Facebook unveiled its Libra project’s whitepaper on June 18, 2019.
According to a former Commodity Futures Trading Commission (CFTC) chairman, Gary Gensler, Libra is a security. The chairman who served the CFTC from 2009 to 2014 made those remarks to the U.S. House of Representatives. He added in written testimony that Libra looks like an investment vehicle that may even resemble some banking structures.
In that context, the Senate Banking Committee has scheduled a hearing that will focus primarily on regulatory frameworks for blockchain and cryptocurrencies in the coming week. The committee added in a press release that it would hold an open session on July 30. That session would be titled: “Examining Regulatory Frameworks for Digital Currencies and Blockchain.”
However, it is not yet clear whether the committee intends to use the session as a fact-finding mission or it would use the opportunity to discuss any pieces of legislation.
The Hearing
The Senate hearing is scheduled to be live-streamed. Furthermore, several expert witnesses will testify when the time comes. Among the witnesses is a member of the Congressional Research Service specializing in international trade and finance, Rebecca Nelson; Circle CEO Jeremy Allaire, a representative of the Blockchain Association; and Mehrsa Baradaran who is a law professor at the University of California Irvine School of Law.
The Senate Banking Committee has held several hearings around the cryptocurrency space. The most recent hearing took place last week primarily focusing on Facebook’s Libra. David Marcus, the head of Facebook’s crypto project who is also the CEO of its Calibra subsidiary was put to task by members of the committee.
Marcus had to answer several questions about his Libra project but the committee members rarely brought up Bitcoin or any other virtual currencies. On the contrary, the Senators took their time to distinguish between the wider crypto ecosystem and Facebook’s stablecoin specifically. That means that the lawmakers may now have a better understanding of the crypto technology and the asset class than they have in the past years.
For example, Senator Brian Schatz (D.-HI) asked Marcus to explain why Facebook specifically had to build crypto. Notably, he did not just argue what the benefits of a cryptocurrency network could be in general.
Now, all eyes in the crypto community focus on the Senate Banking Committee to determine what the future holds.