So the much-speculated big day for the global crypto economy is finally here. The United States Senate is holding an important discussion that could eventually seal the fate for millions of investors, as well as numerous cryptocurrency exchanges, mining farms, and other stakeholders directly or indirectly linked to the digital currency market.
The discussion has been aptly named “Virtual Currencies: The Oversight Role of the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission”. The core issues that are expected to dominate the discussion include the question; to what extent we should expect American financial watchdogs to control partially regulated assets?
To put things into perspective, the Securities and Exchange Commission (SEC) has so far played a proactive role in acting against fraudulent ICOs and has repeatedly issued warnings against such malpractices. However, as the domestic cryptocurrency market continues to expand in tune with the global crypto economy, clarification and a well-defined policy are of paramount importance for all stakeholders.
Jay Clayton and J. Christopher Giancarlo, the heads of the SEC and the Commodity Futures Trading Commission (CFTC) respectively, addressed all issues pertaining to digital currencies along with a number of industry witnesses whose names are listed on the official government portal.
“My remarks may be viewed by some as over simplistic, but they reflect how I present these issues to mainstream investors,” Clayton said in his opening remark.
He continued by segregating the topic of discussion into three sub-categories:
- The technology involving blockchains, which is simply a form of distributed ledger. He explained how blockchain is increasingly viewed by many as a technology that will make the domestic and the global economies much more efficient.
- Cryptocurrencies that can be termed as a digital equivalent of fiat currencies such as the U.S. dollar, albeit with their own unique characteristics.
- Initial Coin Offerings (ICO) which carry a lot of resemblance with a stock offering.
“Enthusiasm of the younger generation should be respected”
The CFTC head, meanwhile, began his opening remark by talking about his three children who, despite all his insistence, never grew interested in the stock market. He mentioned how he was surprised to see them intrigued by bitcoin as its popularity soared worldwide and even spoke of the popular term, HODL, describing bitcoin’s characteristics as a store of value.
Chairman Giancarlo: “We owe it to this new generation to respect their interest in this new technology with a thoughtful regulatory approach.”
Giancarlo suggested that policymakers should respect the enthusiasm of the younger generation, who are clearly drawn to cryptocurrencies and the seemingly bright prospects associated with them. However, he pointed out that there should be adequate legal and regulatory provisions to deter those who wish to abuse the system for personal gains.
He concluded his opening remarks by stating that the people at the helm of the economy should not discount the fact that the total value of cryptocurrencies is negligible compared to the net values of gold and currency markets.
At the time of writing, a number of Senators including Michael Crapo of Idaho, Richard Shelby of Alabama, Jack Reed of Rhode Island, Elizabeth Warren of Massachusetts, and Joseph Donnelly of Indiana, among others, had directed their questions and observations to the duo.