House Committee Considers Competing Regulatory Approaches To Cryptocurrency

At a House Financial Services Committee hearing, entitled "Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States," witnesses shared recommendations on competitiveness, risk and regulatory clarity in the emerging digital assets economy.

In a Memorandum, Committee Majority Staff noted the increase in the market value of digital assets from approximately $500 billion in 2020 to almost $3 trillion over the last year. Majority Staff asserted that regulators are unsure of (i) how to control the high levels of volatility that occur in the digital asset market, (ii) the potential for compliance issues and (iii) the prevalence of criminal activity due to a lack of comprehensive regulation. Majority Staff also emphasized the danger of criminal cryptocurrency activity and the risks associated with theft, fraud and cyberattacks.