2022’s crypt winter saw many crypto users fall victim to hackers in various avenues of Web 3. As a result, the year has been troubled, from NFT hacks to crypto companies dying in the water, such as the FTX scandal.
This unregulated behemoth has led to many countries around the globe starting a campaign to regulate the wild west industry. In addition, the collapse of Silvergate bank and the recent closure of Signature Bank is sending tough messages about the need for regulation in the crypto sector that will not go away.
The House of Republicans is set to renew oversight of class assets due to major changes in crypto regulation. A series of small bills drafted in past months by the House Financial Services Committee wants to fight bigger issues in the upcoming months, said Rep. French Hill, who leads the Financial Technology, Digital Assets, and Inclusion Subcommittee.
When testifying at a hearing, the Chief Legal Officer of Coinbase, Paul Grewal, said that he wished crypto regulation would support the sector and protect consumers. He also said there was a need to work with policymakers to develop frameworks that facilitate US customers’ access to digital asset securities and commodities.
Pressure on Congress to Develop Specific Cryptocurrency Regulations
Market and federal banking officials have been called upon to enforce old financial standards in the crypto industry since the committee needs more information on its plans.
Congress is being pressured by companies dealing with digital assets to build specific regulations for cryptocurrencies similar to those in the European Union. A handful of proposals by the committee suggest that Grewal’s suggestions were taken to heart as they are pro-industry, despite Republicans calling for crypto regulation.
The Need for Regulatory Oversight in Cryptocurrency
Due to the anonymous and decentralized nature of the digital currency, regulatory oversight, and government intervention are necessary for crypto regulation. Authorities are concerned that cryptocurrencies might be used for illicit activities such as tax evasion, money laundering, and financing terrorism.
Cryptocurrency markets are known to experience sudden changes, with prices fluctuating rapidly. These sudden changes create risks for investors that could cause economic instability when left unsupervised.
Concerns have arisen due to the impact of cryptocurrencies on monetary policies and traditional financial systems as cryptocurrencies are gaining wider acceptance. Regulators also want to ensure the financial system’s stability and prevent unethical consumer activities.
Some measures are needed to show how they would prevent blockchain developers from being burdened by reducing the amount of tax information that crypto businesses must provide or certain reporting and licensing requirements. Jerome Powell said the House should take action when he gives his testimony on Capitol Hill this week.