Deciphered Law: Another Congressional Hearing, Dec. 6-13 December
The face-to-face exchanges between US lawmakers and the crypto industry may have finally taken on a constructive character.
The most important regulatory news of the week was the hearings in the US House of Representatives Financial Services Committee on cryptocurrencies. The title of the event – “Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States” – reflected a different mood from countless previous sessions of Congress, primarily about investor protection or security risks or threats. Financial stability.
Based on responses from many participants and industry experts, the exchange was consistently positive, with legislators asking well-informed questions and acting as if their goal could be understanding this new issue rather than acting on preconceived notions. Sure, there were tedious questions about Bitcoin’s ecological footprint and MP Brad Sherman’s objections, but it looked like the constructive dialogue between the digital asset industry and legislators we’ve been waiting for.
Below is a short version of the latest Deciphered Laws newsletter. For complete information on political developments over the past week, subscribe to the full newsletter below.
Listen to the industry
The hearings, convened by the Chairman of the Financial Services Committee, Maxine Waters, focused on the role of cryptocurrency exchanges, the development of the stablecoin sector, and general issues of general regulation of digital assets. Several of the top CEOs of cryptography have been brought together to represent the crypto space.
One of the important topics discussed at the plenary session was the decentralization of the digital ecosystem based on cryptocurrency – a politically advantageous aspect at a time when many US lawmakers are uncomfortable with the seizure of power by the World Wide Web. The feeling of the giants, as well as that US regulators are hesitant to cede certain crypto-investment products, can be seen as symptomatic of a distributed regulatory approach. Also interesting is the relationship between the global role of the US dollar and the growing demand for stablecoins.
BIS: Afraid of DeFi?
Just don’t get carried away with winning Congress, a note in the latest Bank for International Settlements report on decentralized finance should be noted. “Banking for Central Banks” has infiltrated the vast DeFi space and has developed several troubling slogans such as “The Decentralization Illusion” to describe it.
BIS analysts are concerned about some of the structural aspects of the DeFi landscape, such as liquidity mismatches and a lack of shock absorbers such as banks. The report’s authors argue that the protocols that govern DeFi’s operations carry the risk of centralization, which could potentially lead to a concentration of power in these systems in the hands of a few. These statements will surely surprise many, especially among those close to the DeFi space.
CBDC
BIS’s preference for more regulated financial innovation is evident from news that its dedicated department, BIS Innovation Hub, is actively involved in testing cross-border payments based on the digital euro, along with the central banks of Switzerland and France. … The process was deemed successful, but the stakeholders made it clear that it does not guarantee the final release of the European CBDC.
In other news on digital currencies, the Reserve Bank of Australia’s two-year study concluded with a report highlighting the potential of digital banking currency for centralized wholesale trade to improve the efficiency of transactions in financial markets.
The face-to-face exchanges between US lawmakers and the crypto industry may have finally taken on a constructive character.
Posts
The most important regulatory news of the week was the hearings in the US House of Representatives Financial Services Committee on cryptocurrencies. The title of the event – “Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States” – reflected a different mood from countless previous congressional sessions, primarily about investor protection or security risks or threats Financial stability.
Based on responses from many participants and industry experts, the exchange was consistently positive, with legislators asking well-informed questions and acting as if their goal could be understanding this new issue rather than acting on preconceived notions. Sure, there were tedious questions about Bitcoin’s ecological footprint and MP Brad Sherman’s objections, but it looked like the constructive dialogue between the digital asset industry and legislators we’ve been waiting for.
Below is a short version of the latest Deciphered Laws newsletter. For complete information on political developments over the past week, subscribe to the full newsletter below.
Listen to the industry
The hearings, convened by the Chairman of the Financial Services Committee, Maxine Waters, focused on the role of cryptocurrency exchanges, the development of the stablecoin sector, and general issues of general regulation of digital assets. Several of the top CEOs of cryptography have been brought together to represent the crypto space.
One of the important topics discussed at the plenary session was the decentralization of the digital ecosystem based on cryptocurrency – a politically advantageous aspect at a time when many US lawmakers are uncomfortable with the seizure of power by the World Wide Web. The feeling of the giants, as well as that US regulators are hesitant to cede certain crypto-investment products, can be seen as symptomatic of a distributed regulatory approach. Also interesting is the relationship between the global role of the US dollar and the growing demand for stablecoins.
BIS: Afraid of DeFi?
Just don’t get carried away with winning Congress, a note in the latest Bank for International Settlements report on decentralized finance should be noted. “Banking for Central Banks” has infiltrated the vast DeFi space and has developed several troubling slogans such as “The Decentralization Illusion” to describe it.
BIS analysts are concerned about some of the structural aspects of the DeFi landscape, such as liquidity mismatches and a lack of shock absorbers such as banks. The report’s authors argue that the protocols that govern DeFi’s operations carry the risk of centralization, which could potentially lead to a concentration of power in these systems in the hands of a few. These statements will surely surprise many, especially among those close to the DeFi space.
CBDC
BIS’s preference for more regulated financial innovation is evident from news that its dedicated department, BIS Innovation Hub, is actively involved in testing cross-border payments based on the digital euro, along with the central banks of Switzerland and France. … The process was deemed successful, but the stakeholders made it clear that it does not guarantee the final release of the European CBDC.
In other news on digital currencies, the Reserve Bank of Australia’s two-year study concluded with a report highlighting the potential of digital banking currency for centralized wholesale trade to improve the efficiency of transactions in financial markets.
