Crypto Experts Testify in US Senate Hearing on the Future of Digital Currencies

Yesterday, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing entitled “Crypto Crash: Why Financial System Safeguards are Needed for Digital Assets,” to discuss the regulation of the cryptocurrency industry.

The meeting covered a number of topics including the need for stablecoin regulation, consumer protection, and how different agencies would cooperate to regulate digital assets.

Democratic senator Sherrod Brown chaired the hearing, which followed calls by the White House to increase efforts to regulate the crypto industry. Senator Brown in his opening remarks stated that “the crypto nightmare” isn’t over yet, referring to the potential fallout from last year’s implosion of FTX.

A number of experts testified at the hearing, including Lee Reiners, executive director of the Global Financial Markets Center at Duke Law School, and Linda Jeng, General Counsel and Chief Regulatory Officer at the Crypto Council for Innovation.

While some experts said it would be best to let the industry flourish and allow innovation, others warned of the risks the digital asset world poses to traditional finance.

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For example, Reiners said that crypto was not good for “financial markets, investors or national security” and that it should be restricted from entering the banking system”. He also added that most cryptocurrencies are probably also securities under the definition in the Howey test.

Jeng, on the other hand, had a more favorable view of crypto. She stated that crypto policy needs to focus on innovation and encouraging access, efficiency, and efficacy for consumers.