Overhaul plans for crypto regulation gain traction in the Republican House

Crypto regulation could see a major overhaul as House Republicans take steps to renew oversight of the emerging asset class.

According to Rep. French Hill, who chairs the Subcommittee on Digital Assets, Financial Technology and Inclusion, the House Financial Services Committee has drafted a number of smaller bills in recent months, but the committee intends to tackle broader issues in the coming months.

About crypto regulation and degradation

On Thursday, Paul Grewal, Coinbase’s general counsel, testified at a hearing. In his prepared remarkshe called for the establishment of a crypto regulation that would both support the sector and protect consumers.

Grewal said:

“We need policymakers to work together to develop a comprehensive framework that provides avenues for customers to access both digital assets and digital asset securities in the United States.”

Little is known about what the committee plans to propose, but it comes as federal banking and market regulators step up enforcement of traditional financial standards in the crypto industry.

The digital asset companies are pushing Congress to create a unique set of regulations for cryptocurrencies, similar to what has been done in various regions such as the European Union.

Image: Forbes

A great need for crypto oversight

Despite Republican calls for crypto regulation, several proposals in the committee are industry-friendly, suggesting Grewal’s recommendations are being taken to heart.

The need for government and regulatory oversight of cryptocurrency stems from several concerns related to the digital currency’s decentralized and often anonymous nature.

Without oversight, experts worry that cryptocurrencies could be used for illegal activities, such as money laundering, financing terrorism and tax evasion.

In addition, cryptocurrency markets have been known to experience extreme volatility, with prices fluctuating wildly for short periods of time. This volatility creates risk for investors and can lead to greater financial instability if left unchecked.

Also, as cryptocurrencies gain greater acceptance, concerns have emerged about the potential impact on traditional financial systems and monetary policy. Regulators are also concerned with protecting consumers from fraudulent activities and ensuring the stability of the financial system.

Crypto total market cap currently at $887 billion on the daily chart | Chart: TradingView.com

Proponents of crypto regulation argue that reasonable regulations can help prevent illegal activities, protect consumers, and support the long-term growth and stability of the cryptocurrency market.

Some of the measures aim to show congressional support for blockchain technology and digital assetswhile others would exempt blockchain developers from certain reporting and licensing requirements or reduce the amount of tax information crypto companies would have to provide.

Similarly, Federal Reserve Chairman Jerome Powell said this week that the House should weigh in during his testimony on Capitol Hill.

– Featured image from Canva