Circle CEO Suggests Congress Should Look at Cryptocurrencies As A New Asset Class
The U. S. Senate Banking Committee is preparing to discuss the crypto industry once more and potentially create some regulation that will shape the course of the industry in the country. The CEO of Circle, Jeremy Allaire, is one of the people who will be consulted by the Senate.
He is a representative from the Blockchain Association as well, which is an important trade group that deals with the blockchain. Allaire will be joined by Rebecca Nelson, a Congressional Research specialist and by a University of California Law professor called Mehrsa Baradaran.
This upcoming hearing is set to examine some important questions about regulation that will affect the whole industry. It will be fairly different from the recent Facebook hearings, which were focused on the Libra asset.
The head of the Blockchain Association, Kristin Smith, has also told the media that she is pretty optimistic about the new hearings because they will be focused on what the country is doing, its main regulatory challenges and how to improve. This is seen as the chance to make the government more interested in investing in this sector and creating a regulation that can help with investments.
Allaire has pointed out that the U. S. Congress should start treating the crypto asset as their own asset class. To him, the current regulatory laws are simply not able to let companies conduct business within the country and the old regulation is simply getting in the way. This, he affirmed, will put national companies in disadvantage when it comes to developing the industry.
He also affirmed that the technology is being globally developed and the U. S. cannot lose its chance to be a part of the change. The U. S. Congress should start to adopt policies that could establish cryptos as new assets and make them exempt from some regulations in order to foster innovation.
The new legislation, he believes, has the potential to change how securities, commodities, banking laws and other regulations exist.
Circle, his company, is facing some difficulties in acting on the country, for instance, which is why Allaire feels that he is a good person to deal with this. He had to lay off staff, restrict Americans from using the platform and move a part of the business offshore in order to keep up with the regulation.
Crypto And Libra: Two Distinct Things
Right now, everybody wants to be as far from Libra as possible. The truth is that the token created by Facebook is far from uncontroversial and several people have been complaining about it on Congress. Lawmakers even drew a distinction between the token and other crypto assets during the latest hearing.
Allaire follows this move and contrasted Libra with Circle’s USD Coin (USDC), which, according to him, is a very different stablecoin. While Libra is a new global currency and wants to be a real unit of account, USDC is said to be only a “path” for fiat currencies to work as digital currencies because each token is backed by fiat.
Nelson is also trying to differentiate Libra from other tokens. According to her, Libra is pretty much the opposite of other tokens when privacy is the focus. While the government deems that some tokens may prove way too much privacy, Libra is the exact opposite as most people are concerned that it will give its users any privacy at all.
Facebook is often involved in schemes involving leaked information, so this is a pretty common fear. Most cryptos, however, are not privacy-focused. Most of them, like Bitcoin, may not link the name of the users to transactions but are trackable in case some foul play is done.
Although Facebook’s Calibra, the organization that will manage Libra, has affirmed that the privacy of the users will be protected, nobody is actually really sure about this.
However, at the moment it is pretty unclear whether Facebook and Libra will actually be subjects of the conference which is set to happen this week or not. There is a large chance that nobody will actually talk about it.
Allaire affirmed that he does not hope to hear anything “new” during the conference, just to discuss most of the subjects which are already being discussed for some time.
Using Cryptos For Financial Inclusion
While the CEO of Circle is certainly looking out for the interests of entrepreneurs and investors, Nelson and Baradaran are looking at different angles. Nelson, for instance, is focused on international regulatory structures and the potential that cryptos have to be more widely adopted by central banks.
She affirmed that the large-scale adoption of cryptos could represent a big change in the financial landscape and that it could help to boost consumer protection, privacy, and even sanctions policies if used well.
Baradaran will focus more on the current financial system and how cryptos can impact unbanked people. He is focused on financial inclusion and is still somewhat skeptical about how cryptos can really help in this regard. He is far from anti-crypto, though, just not a great believer.
The Law professor affirmed that the inequalities and issues of the banks must be fixed, but by democratic means, cryptos will not take over public institutions, he affirmed.