Finally Congress grasps crypto

Occasionally an investigation turns up a piece of evidence that is unexpected, and is in fact more valuable that the information that is actually being sought. It could be said that last week’s Congressional hearings into Facebook’s Libra did just that.

What it revealed is that Congress does understand bitcoin and cryptocurrency generally, Why is that important? Because the majority of people were convinced that Congress couldn’t even master Crypto 101.

I read Nikhilesh De’s article at Coindesk with interest. He starts his piece saying, “Congress might actually get crypto,” and then proceeds to demonstrate how he came to that conclusion. As he comments, the lawmakers “took pains to distinguish between the social network’s project and the broader cryptocurrency ecosystem.”

And others back De’s thesis. Omer Ozden, CEO of Rocktree Capital, a blockchain-focused merchant bank said, “Whatever their thoughts on Facebook and Libra, they didn’t paint their thoughts of bitcoin and crypto with the same brush.”

De also remarks that while some members of Congress, such as Brad Sherman (D.-CA), trotted out the same old nonsense about cryptocurrencies being the bastion of criminal activity, other lawmakers revealed that these old tropes no longer had any standing with them. That is a big move forward, and indicates a more mature approach to crypto by those in the US government. Ozden remarked on it as well, saying, “I was really impressed to see they knew enough to say ‘we know the hearings are separate from crypto. They at least knew enough to separate that.”

Perianne Boring, founder of the Chamber of Digital Commerce, held a blockchain education event with lawmakers the day after the second hearing and commented, “We’ve come a long way in terms of the understanding of blockchain technology and cryptocurrencies in Congress,” adding, “It was encouraging to see that there are more members of Congress … that are able to make that distinction between different types of products and services and applications that are available and also being able to understand they’re different.”

Matthew Trudeau, chief strategy officer at crypto derivatives exchange ErisX, who also participated in the education event was similarly enthusiastic: “It is clear that lawmakers are aware of the great potential of this new industry.”

There were also discussions about the Bill written by members of the House Financial Services Committee that would prevent companies with more than $25 billion in assets from providing financial service, i.e. Facebook, Amazon, Apple et al.

Chen Arad, chief marketing officer of compliance at Solidus Labs, said the way the committee appears to be handling this potential legislation was another positive sign. He commented “I particularly appreciated Chairman Waters repeatedly admitting the committee doesn’t understand the issue well enough, and that they’re looking to learn before they can take legislative action effectively.”

This all points to America’s lawmakers being more crypto-friendly, even if they do have doubts about it being in the hands of the tech giants.