“America on FIRE”: Congressional Crypto Hearing Focused on the Market Frenzy
Cryptocurrencies were once again the focus of the hearing of a subcommittee of the House Financial Services Committee on June 30.
Right from the get-go, Congress was pretty clear on their bais with the hearing titled “America on ‘FIRE': Will the Crypto Frenzy Lead to Financial Independence and Early Retirement or Financial Ruin?”
Instead of crypto itself, the focus of the hearing was more on surface-level things, especially trading.
These Congressional hearings are pretty demoralizing for those of us working on US crypto policy.
There are real issues of national strategic importance to work out—huge opportunities to capitalize on—but we're still stuck on surface-level criticisms & distractions.
— Jake Chervinsky (@jchervinsky) June 30, 2021
Rep. Tom Emmer (MN-6) was seemingly bullish on crypto, emphasizing tech innovation and how it’s the future of finance. Lack of regulations makes people hesitant to participate, and American entrepreneurs are missing out, he said.
Another supporter was Rep. Warren Davidson (OH-8), who talked about countering China which is building the creepiest surveillance tool in history, by embracing the potential of this technology.
Rep Brad Sherman (CA-30) remained as bearish on crypto as ever, which he said is loved by tax evasionists. According to him, the California lottery would make a better “bet” than blockchain.
“Cryptocurrency is something you can bet on, but if people want to have the animal spirits to take risk, I’d prefer they invest in equity markets to support the building of American companies, or the California lottery to support the schools in my state.”
To Rep Al. Green (TX-9), crypto reminds him of the financial crisis of 2008. “I do have some consternation, and my consternation emanates from 2008,” he said while speaking about the $700 billion bailout package he voted against at the time.
“I learned an important lesson. Do what you think is in the best interest of your constituents, even if they disagree.”
But as Galaxy Digital’s Mike Novogratz pointed out in a recent interview, the latest drawdown of 50% to 75% in the cryptocurrency sector happened without a plunge protection team, and lawsuits like in traditional finance and the system worked how it was supposed to.
“So I saw these last three weeks as an amazing test and an amazing successful test for the whole crypto ecosystem.”
From the cryptocurrency market side, Peter Van Valkenburgh, Director of Research at Coin Center, gave the testimony.
Commenting on the energy usage, he explained that “the traditional financial sector uses an estimated five times more energy than Bitcoin,” adding that Bitcoin’s energy usage doesn’t scale per transaction.
Talking about the beauty of peer-to-peer ledgers, he shares that “it’s not a proprietary standard from a corporation” and shows us that transactions are “not censored by some third party or some government that wants to coerce certain transactions or block certain transactions.”
“For every transaction, we want blocked, there’s a transaction that we should celebrate for being unstoppable.”