A big fight is brewing for cryptocurrencies. Here are some key players to watch out for

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Cryptocurrency is at a crossroads.

As its popularity explodes, the Biden administration is laying the groundwork to set rules for an industry that has grown in popularity, but has so far fallen into regulatory hell.

This triggers what is likely to be a heated debate over which agencies have the power to regulate cryptocurrencies like Bitcoin – and what the oversight responsibilities of Congress should be in a market that has reached $ 2.5 trillion, slightly less than the size of the French economy.

At this time, it is expected that oversight will likely be divided between several regulators, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Yet there is a divergence of views on how tight the rules are, from lawmakers who think the United States should embrace what they see as a financial revolution, to watchdogs alarmed by an industry they say is in prey to fraud and bad actors.

Here are some of the key players to watch out for as this debate takes shape.

SEC Chairman Gary Gensler

Gensler, a seasoned regulator who returned to Washington, DC, to lead the SEC, is perhaps the person who will help most in determining the rules on cryptocurrencies.

As the head of the SEC, he is responsible for protecting investors and ensuring fair and orderly markets.

At the Massachusetts Institute of Technology, he taught a popular course called “Blockchain and Money”.

Confirmed by a vote of 53-45, Gensler said – in speeches and testimony in Congress – that cryptocurrencies and related financial products should be subject to more stringent regulation.

“At the moment, we don’t have enough investor protection cryptos,” Gensler told the Aspen Security Forum in August. “Frankly, right now, it’s more like the Wild West. “

Crypto-savvy members of Congress on both sides of the aisle say they’re happy Gensler speaks their language, but lawmakers who want fewer or less stringent rules worry Gensler, and the SEC will put in place tough new rules .

Whatever he discloses, Gensler said he would like Congress to be involved.

“We need additional congressional authorities to prevent transactions, products and platforms from falling through regulatory loopholes,” he said in August. “We also need more resources to protect investors in this growing and volatile industry. “

Acting President of the CFTC Rostin Behnam

Member of the Commodity Futures Trading Commission since 2017, Rostin Behnam has been appointed to be its next chairman. (He is currently doing the work on an interim basis.)

There is a turf war between regulators, mainly between the SEC and the CFTC, over which agency should have the primary authority to regulate cryptocurrencies.

During his confirmation hearing before the Senate Agriculture Committee in October, Behnam argued that the CFTC should have a greater regulatory role, although he acknowledged that it would be “a departure from our historical role of regulator of derivatives “.

“I think it’s important to have a senior cop on the job,” he told lawmakers. “And certainly the CFTC is ready to do it if this committee wishes.”

Behnam’s argument goes to the heart of another fundamental question that regulators grapple with: how to define cryptocurrencies. Currently, they can be viewed as both commodities and securities, a confusion that reflects the current lack of regulatory clarity.

Secretary of the Treasury Janet Yellen

Historically, the Treasury Department has overseen the drafting and implementation of new regulations across all agencies, and when it comes to cryptocurrency, it is likely to play a similar role.

He just released a new report written by a group of regulators on “stablecoins” – a cryptocurrency tied to a traditional asset like the dollar.

In the report, the Treasury called on Congress to be clear about who has authority over stablecoins. Otherwise, the Financial Stability Supervisory Board, chaired by Treasury Secretary Janet Yellen, could implement new regulations, the report said.

Senator Elizabeth Warren (D-Mass.)

The progressive senator from Massachusetts, Earl Warren, is a cryptocurrency skeptic. She expressed concerns about investor protection – or the lack of it.

Although cryptocurrencies are owned by millions, they have also been used by bad actors, notably to demand ransomware payments in virtual money. Hackers have also stolen funds from crypto exchanges.

Warren will likely help shape regulations as a member of the Senate Banking Committee, and she believes Congress needs to do more to regulate cryptocurrencies.

“Right now our regulators, and frankly our Congress, are an hour behind and a dollar short,” she told Bloomberg TV. “We need to know where these cryptocurrencies are going.”

Senator Cynthia Lummis (R-Wyoming)

Then there are the strong supporters of cryptocurrency, like Lummis.

The junior senator from Wyoming calls herself a “HOLDler,” which is crypto language for someone who has bought cryptocurrency and continues to hold it despite its extreme volatility.

Lummis is one of the few lawmakers to personally invest in cryptocurrency, which means that she could personally win or lose regulations made by Congress.

After his son-in-law introduced him to crypto, Lummis bought his first Bitcoin in 2013, for $ 330. Today it is worth over $ 60,000 and she has bought more cryptocurrency in recent months.

Lummis, a member of the Senate Banking Committee, favors “light regulation,” she said. “We want innovators to innovate. We want to create a space where the United States is the leader in opportunities for the creation and use of digital assets. “

Senator Patrick Toomey (R-Pa.)

As a leading member of the Senate Banking Committee, Senator Patrick Toomey has invested in cryptocurrency – in Bitcoin and Ethereum. Earlier in his career he was a currency trader.

Toomey suggested that cryptocurrency could be “as revolutionary as the Internet”.

Toomey, who will retire next year, called on his colleagues and regulators to “recognize that open public networks are here to stay,” and he spoke openly against excessive oversight and regulation of cryptocurrencies .

Last month, after China effectively banned Bitcoin mining and trading, Toomey argued it was “a great opportunity for the United States” to become a world leader in cryptocurrencies.

House legislators

A diverse group of lawmakers are also likely to help shape the future of cryptocurrency regulation.

Take Representative Darren Soto, D-Fl., For example, who acts as the co-chair of the Congressional Blockchain Caucus.

He has spent most of his time in Congress focusing on technology issues, and he says he sees a lot of potential in cryptocurrency as an “emerging technology,” though he’s also worried about it. the way bad actors use cryptocurrency.

Or Rep. Bill Foster, D-Il. Few lawmakers on Capitol Hill are as proficient in the technology behind cryptocurrency as Foster, who has a doctorate. in High Energy Particle Physics from Harvard University.

Foster is skeptical of the cryptocurrency – he’s worried about the environmental impact of Bitcoin mining, for example.

There is also Representative Warren Davidson, R-Ohio. A member of the House Financial Services Committee, Warren Davidson first became interested in digital payments in the mid-2000s, he says.

Davidson is concerned that Congress is moving too slowly to establish rules for cryptocurrencies.

“The industry is basically arguing, ‘Give us some regulatory clarity,’” Davidson says. “We should be able to solve this problem, and we could, and we can do it quickly. “

Copyright 2021 NPR. To learn more, visit https://www.npr.org.



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