On July 18, 2018, a joint hearing was held by the US House Financial Services Committee and Subcommittee on Monetary Policy and Trade regarding the future of cryptocurrencies and their impact on the financial system. The hearing, titled “The Future of Money: Digital Currency,” featured a panel of experts who discussed the possibilities and risks associated with the use of cryptocurrencies.
The hearing began with opening statements from the committee members, who expressed their concerns and hopes regarding cryptocurrencies. Representative Andy Barr, a member of the Subcommittee on Monetary Policy and Trade, expressed his optimism about the potential of blockchain technology, but also raised the issue of crypto scams and the need for regulatory oversight.
The first panelist to present was Dr. Rodney Garratt, a professor at the University of California, Santa Barbara who specializes in cryptocurrency and blockchain technology. Garratt emphasized the need for regulation, stating that “cryptocurrencies can pose significant risks to the financial system if left unchecked.”
He also discussed the potential benefits of using cryptocurrencies, such as increased financial inclusion, and the need for collaboration between industry participants and regulators to create a framework for the safe and effective integration of these technologies into the financial system.
The second panelist, Peter Van Valkenburgh, Director of Research at Coin Center, a non-profit research and advocacy group focused on cryptocurrencies, presented a more positive outlook on the technology. Van Valkenburgh argued that cryptocurrencies are a natural evolution of our current financial system and can offer a more efficient and decentralized form of money, which would be beneficial for consumers and businesses.
He also emphasized the importance of allowing market forces to drive innovation, and called for a regulatory environment that balances consumer protection with innovation and growth.
The final panelist, Dr. Norbert Michel, Director of the Center for Data Analysis at The Heritage Foundation, presented a more cautious view of cryptocurrencies. Michel argued that cryptocurrencies are not yet a reliable store of value or medium of exchange, and that their rise is largely due to speculation and hype.
He also raised concerns about the potential for cryptocurrencies to be used for illicit activities, and called for the implementation of strict anti-money laundering and other regulatory measures to combat these risks.
The hearing concluded with questions from committee members, who probed the panelists on issues ranging from the potential for cryptocurrencies to disrupt the current financial system, to the role of central banks in the regulation of these new technologies.
Throughout the hearing, it was clear that there is a wide range of views on the future of cryptocurrencies and their impact on the financial system. However, there was a general consensus among the panelists and committee members that regulation is necessary to ensure the safety and stability of these new technologies.
The hearing also highlighted the need for collaboration between industry participants and regulators to create a framework that balances innovation with consumer protection and regulatory oversight. Ultimately, the future of cryptocurrencies and their role in the financial system will depend on how these various interests can work together to create a safe and effective ecosystem for these new technologies.
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