Date
16 November 2018
Lawmakers are concerned that cryptocurrencies could threaten the US economy. Photo: Reuters
Lawmakers are concerned that cryptocurrencies could threaten the US economy. Photo: Reuters

US Congress sets sights on federal cryptocurrency rules

US lawmakers are moving to consider new rules that could impose stricter federal oversight on bitcoin and other cryptocurrencies, Reuters reports, citing several top lawmakers.

Bipartisan momentum is growing in both houses of Congress for action to address the risks posed by virtual currencies to investors and the financial system, the lawmakers said.

Even free-market Republican conservatives, normally wary of government red tape, said regulation could be needed if cryptocurrencies threaten the US economy.

“There’s no question about the fact that there is a need for a regulatory framework,” said Republican Senator Mike Rounds, a Senate Banking Committee member.

At present, digital assets fall into a jurisdictional gray area between the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Treasury Department, the Federal Reserve and individual states.

Much of the concern on Capitol Hill is focused on speculative trading and investing in cryptocurrencies, leading some lawmakers to push for digital assets to be regulated as securities and subject to the SEC’s investor protection rules, the news agency said.

“The SEC is properly the lead on the issue,” said Republican Representative Bill Huizenga, chairman of the House Financial Services Subcommittee on Capital Markets which will hold hearings on the issue in coming weeks.

Huizenga said the recent growth of the virtual currency market had made him more comfortable with more oversight. “Six months ago, we didn’t see this explosion. The marketplace has changed,” he said.

Carolyn Maloney, a Democratic senior member of the House Financial Services Committee, is another lawmaker advocating for direct oversight of digital assets by the SEC.

”A lot of people don’t realize there’s nothing backing these virtual currencies,” she said.

Bitcoin, the best known virtual currency, lost over half its value earlier this year after surging more than 1,300 percent.

“We have to look carefully at all of the cryptocurrencies and make sure individuals don’t get taken advantage of,” said Representative Tom MacArthur, a House Financial Services Committee Republican.

Regulators globally have raised the alarm over cryptocurrencies, saying they may aid money laundering and terrorist financing, hurt consumers and undermine trust in the global financial system.

France and Germany want cryptocurrencies on the agenda for the upcoming G20 meeting of the largest advanced and developing economies.

The SEC and CFTC chairmen recently called for greater scrutiny of digital assets before the Senate Banking Committee. Members of the panel said the regulators will return to discuss how to move forward.

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CG

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