The stablecoins and the role of the congress in the fight against the future legislation on digital assets took the front of the stage during one of the first hearings of the senatorial banking committee to focus on what a regulatory framework for crypto could look like.
The hearing on Wednesday, supervised as the starting point for a congression action on the regulation of digital assets, was the first organized by the new subcommittee of digital assets of the banking committee and chaired by the Wyoming Republican, Cynthia Lummis, a long-time cryptography supporter.
“We are about to finally create a bipartite legislative framework for the stablescoins and the structure of the market,” said Lummis in her opening declaration, referring to the project of legislation she presented with the Democrat of New York Kirsten Gillibrand as a natural counterpart to financial innovation and the technology of the Chamber for the law of the 21st century.
Stablecoins will be the first on the agenda of the Committee, she said, echoing the statements made by the White House crypto and the IA tsar David Sacks and the South Caroline Republican Tim Scott, who chairs the General Committee of Senate Banks.
Former CFTC president Timothy Massad, one of the four hearing witnesses, told legislators to focus on stable legislation for the moment and to postpone market structure efforts “for several years”.
“For four years, the cryptographic industry called on the SEC and the CFTC to develop rules and advice and to stop regulating by the application; this now happens,” he said. “The SEC has abandoned the cases of application and launched a crypto working group to solve these problems. We must let these regulatory emission initiatives progress before rushing to rewrite the securities law.”
The existing proposals to update the regulations on the structure of the market to approach the crypto have the potential of “creating more confusion than clarity”, he added, in particular to define how a digital asset could be security, merchandise or something else.
These proposals could potentially undermine the laws on existing securities, especially if they deal with decentralized finances.
“This term is used to describe many things that are not decentralized,” continued Massad. “There are almost always control vectors. And even if a process is decentralized or automated, this does not mean that it should be exempt from the regulations.”
Virginie Mark Warner’s Democrat has asked the panelists to discuss the possibility that stablesco users will put your customer’s knowledge processes, noting that a transmitter can perform KYC but that a stablecoin can be transferred between portfolios without these intermediate transfers passing through a KYC process.
“I want to access a regulatory framework that works, but I saw – echo what others said on the classified side – Oh my god, a whole bunch of bad things,” said Warner. “So help me understand, and I recognize [for] Some people, anonymity and the role of disintermediation that blockchain plays, but how to put minimum protections from the transmitter until conversion to Fiat? “”
The co-founder and legal director of Lightskar, Jai Massari, noted that even if the self-controdable portfolios do not lead KYC, “there is an immutable recording at the top of these transactions which can be monitored, not only by the transmitter, but also [by] Third parties, including the police. “”
Although mixers and other tools can obscure transactions, childcare wallets always lead KYC at the end of a chain of transfers, she noted.
“I agree that we must continue, such as industry, to develop new tools to solve these problems,” said Massari.
