Stablecoins and the role of Congress in the address of the future digital asset legislation took the center of the stage during one of the first hearings of the Senate Banking Committee to focus on how a regulatory framework for cryptography would be seen.
Wednesday’s hearing, framed as the starting point for a greater action of the Congress on digital asset regulations, was the first one organized by the new subcommittee of digital assets of the bank committee and chaired by the Republican Republican of Wyoming Cynthia Lummis, a cryptographic proponent for a long time.
“We are at the precipice of finally creating a bipartisan legislative framework for both the stable and market structure,” Lummis said in his opening statement, referring to the legislation projects he presented with the New York Democrat Kirsten Gillibrand as a natural counterpart of the innovation and financial technology of the Chamber for the Law of the 21st century.
However, Stablecoins will be the first on the Committee Agenda, he said, echoing statements made by the Cryptography of the White House and AI Tsar David Sacks and the Republican of South Carolina, Tim Scott, who chairs the General Senate Banking Committee.
The former president of CFTC, Timothy Massad, one of the four witnesses of the hearing, told the legislators to focus on the Stablcoin legislation at the moment and differ the efforts of the market structure “for several years.”
“For four years, the cryptographic industry has asked the SEC and the CFTC to develop rules and guidance and stop regulating for the application; that is happening,” he said. “The SEC has eliminated application cases and launched a cryptographic working group to address these problems. We should let these regulatory problems progress progress before hurrying to rewrite the Securities Law.”
The existing proposals to update the regulations of the market structure to address cryptocurrencies have the potential to “create more confusion than clarity,” added, particularly around the definition of how a digital asset could be security, merchandise or something else.
These proposals could undermine existing values, especially if they address decentralized finances.
“That term is used to describe many things that are not decentralized,” Massad continued. “There are almost always some control vectors. And even if a process is decentralized or automated, that does not mean that it must be exempt from regulation.”
Virginia’s Democrat, Mark Warner, asked panelists to discuss the possibility that Stablcoin users who carry out their customers’ knowledge processes, point out that a sender can carry out KYC, but that a stablcoin can be transferred between wallets without those intermediate transfers that cross a KYC process.
“I want to reach a regulatory framework that works, but I have seen, echoing what others have said on the classified side, Oh my God, a lot of bad things,” Warner said. “So help me understand and recognize [for] Some people, the anonymity and the role of disintermediation that the block chain plays, but how do we put some minimal protections of the issuer to the conversion to Fiat? “
The co -founder and legal director of Lightspark, Jai Massari, said that despite the fact that self -odled wallets do not lead to KYC, “there is an immutable chain registration of those transactions that can be monitored, not only by the sender, but also for the issuer, but also. [by] Third parties, including the application of the law “.
While mixers and other tools can obfuscar transactions, custody wallets still carry out KYC at the end of a transfers chain, he said.
“I agree that we must continue, as the industry has done, to develop new tools to address these problems,” said Massari.
