How policy and regulation impact the crypto world – and the other way around By Nikhilesh De Managing Editor, Global Policy & Regulation June 15, 2021 If you were forwarded this newsletter and would like to receive it, sign up here.
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Welcome to State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. I’m your host, Nikhilesh De. You’re probably here because you signed up, but in case you're not a fan, you can unsubscribe here.
Congress is holding four different hearings that are directly tied to crypto this month, reflecting growing scrutiny around the industry.
—Nik
Growing hearings The narrative In about 30 minutes, the House Financial Services Committee Fintech Task Force is going to kick off a hearing on central bank digital currencies. It’s one of four major Congressional hearings on crypto this month. Why it matters It feels like Congress is starting to look a bit more closely at crypto. Four different hearings in June are going to focus on the recent crypto bull market, whether bitcoin is bad for investors and good for criminals and what lawmakers can or should do about it. Breaking it down I’m going to be honest: I had a plan for this week’s newsletter, but I wasn’t able to get all the reporting I hoped for. So we’re winging it today, based on a Twitter poll.
Last week, U.S. Sen. Elizabeth Warren (D-Mass.), a former presidential contender and a longstanding advocate for consumer protections, hosted a Senate subcommittee hearing on cryptocurrencies. On paper the hearing was about central bank digital currencies (CBDCs) but bitcoin (and to a lesser extent, crypto at large) ended up being the real subject. And if you’re bitcoin, it wasn’t a great hearing.
Warren took aim at bitcoin’s price volatility, some of the consumer protection concerns around digital assets and the energy required to secure the bitcoin network. These aren’t new concerns – we’ve been hearing about these for years. But last week’s hearing – and another three occurring this month – suggest we’re getting to a new stage of regulatory awareness. Here’s my rough historical summary:
So we’ve been heading here for a while. The question is, what happens next? I haven’t seen any proposed legislation but the fact we’re going to see several more hearings (including another one promised by Warren) suggests an increasing amount of discussion from lawmakers.
Odds and ends There has been a lot of signal on the regulatory front these days. It’s worldwide – not just in the U.S. – and it has been frankly a little mind blowing. What’s most interesting to me is all of the moves we’re seeing suggest policymakers by and large are looking at crypto as something that can and should be regulated, but not something that could or should be banned. Some of this has been developing for years but the signalling is certainly far more prominent now than it was even 24 months ago. Here’s a quick list:
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The Biden Bunch Changing of the guard Key: (nom.) = nominee, (rum.) = rumored, (act.) = acting, (inc.) = incumbent (no replacement anticipated) It feels like we’re in a holding pattern here so informal poll time: Should I keep this section? (Feel free to respond to this email or message the Telegram chat with your thoughts.)
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If you’ve got thoughts or questions on what I should discuss next week, or any other feedback you’d like to share, feel free to email me at nik@coindesk.com or find me on Twitter @nikhileshde.
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See ya’ll next week!
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