The Joint Economic Committee (JEC) recently hosted a hearing focused on digital assets and the government’s role in regulation and policy.
The hearing, “Demystifying Crypto: Digital Assets and the Role of Government,” explored domestic and global regulatory, policy, and economic concerns posed by digital assets.
“The mainstreaming of digital assets is laying the foundation for huge swaths of the economy to invest in this market,” JEC Chair Don Beyer (D-VA) said. “Increased crypto market volatility or a digital bank-run could disrupt more mainstream financial institutions like pension funds or mutual funds. And the underlying assets can create significant consumer protection issues given existing patterns of financial fraud, hacks, and market manipulation.”
In recent years, financial markets have adopted utilizing digital assets such as Bitcoin and other cryptocurrencies. The growth accelerated amid the COVID-19 pandemic – with the reported total value of all cryptocurrencies increasing from $200 billion in January 2020 to nearly $3 trillion as of last week.
Existing regulation updates can aid innovation guidance while protecting investors and the integrity of financial markets.
“Congress should continue to examine if there are regulatory gaps that require new legislation to ensure consumer and investor protection in the cryptocurrency space,” Alexis Goldstein, director of Financial Policy at the Open Markets Institute, said. “Congress should ensure there are mechanisms for the regulators to have a complete picture of systemic risk in the space. Regulators should continue to monitor digital asset markets and ensure compliance with existing regulations.”