The Energy and Commerce Committee’s subcommittee for Commerce, Manufacturing, and Trade heard from members of the cryptocurrency industry today. The hearing was a part of their Disrupter Series that previously held talks on the Internet of Things, Drones and other emergent technologies. Twenty congresspeople are members of the subcommittee.
Representing the Bitcoin industry was Jerry Brito of Coin Center, Juan Suarez counsel for Coinbase, Matthew Roszak from the Chamber of Digital Commerce and Bloq, John Beccia from Circle, Paul Snow from Factom, and Gennaro Cuomo, the Vice President of Blockchain Technologies for IBM. Dana Syracuse, the former Associate General Counsel for the New York Department of Financial Services (NYDFS) and current counsel for law firm BuckleySandler.
The hearing was clearly focused on education, and there was a lot of educating to do. The representatives showed a fundamental lack of understanding about digital currencies and blockchain technologies. At one point, Representative Leonard Lance (R – New Jersey) asked if “customers can invest in these digital currencies[.]” It had to be explained to him that many of the companies represented at the hearing sell bitcoins to their customers.
Among other concerns the congresspeople had about Bitcoin and digital currencies include the price volatility, consumer protections (particularly the irreversible nature of Bitcoin transactions) money laundering, terrorism financing and ransomware.
Brito countered that ransomware has been around for twenty five years and argued that cyber security, not bitcoin regulation, is the key to preventing it.
Snow attempted to illustrate that while Bitcoin lacks the reversible fail-safe of other transaction methods, it has the potential to provide other consumer protections. He specifically mentioned allowing customers to look up data on the blockchain to see if a product was legitimate or a counterfeit. Congressperson Janice Schakowsky (D – Illinois) didn’t seem to enjoy this shift in conversation from her direct question about reversibility, and seemed dismissive of his answer.
For most of the hearing, the members of the cryptocurrency industry were busy educating the congresspeople on the basics of bitcoin, blockchains and digital currencies. Much of the discussion doesn’t reach the standard for “newsworthy” however, there was one bit of information that may be of interest to the community and our readers.
During his opening statements IBM’s Cuomo stressed the importance of openness in blockchains. He stated that “Blockchains must be open to reach their full potential” and stressed the importance of open source software.
This is significant because IBM is one of the largest companies to invest in blockchain technologies and is developing its own “enterprise grade” blockchain. The Hyperledger project that IBM is a part of is open source, so his comments weren’t a complete surprise. That said, Cuomo’s statement was a strong public commitment to keeping distributed ledgers distributed, while other companies are touting the supposed advantages of private blockchains.
The event started late possibly due to the Washington DC Metro shutting down for emergency maintenance. The hearing ran for roughly an hour and forty-five minutes. The sub committee includes eight democrats and twelve republicans.
We will keep you up to date on all Bitcoin regulation news. You can watch the hearing below.