Tuesday brought a collective sigh of relief from crypto investors and industry observers around the world, as the U.S Senate hearing on “Virtual Currencies; The Oversight Role of the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission” concluded on a positive and bullish note.
The Senate Committee on Banking, Housing and Urban Affairs met on Feb 6 at 10am, heard the testimonies of the chief of the Securities and Exchange Committee, Jay Clayton and the Commodity Futures Trading Commision chief, J. Christopher Giancarlo.
In a period of heightened sensitivity within the market, many were concerned that an aggressive and negative stance with regards to cryptocurrencies would cause further market pullbacks; the positive and educated stance taken by both witnesses was a refreshing and exciting surprise for all blockchain enthusiasts.
With bitcoin dismissed by financial industry leaders more often than not, Giancarlo’s remark that “If there were no bitcoin, there would be no distributed ledger technology”, earned him significant points in the crypto community around the world.
The testimony of Giancarlo, touched on many topics including bitcoin futures, educating the market, benefits of blockchain/distributed ledger technology and potential policies and regulation. With his agency already involved in leveraging existing laws to protect US citizens in the U.S futures market and setting up an innovation lab which focuses on distributed ledger technology and blockchain, Giancarlo is an ambassador when it comes to embracing the fact that blockchain technology is here to stay – his testimony stated clearly that they cannot simply “put the technology genie back in the bottle”.
“DLT [distributed ledger technology] is likely to have a broad and lasting impact on global financial markets in payments, banking, securities settlement, title recording, cyber security and trade reporting and analysis.” The general sentiment was that blockchain needs to be embraced, and a balance needs to be found where any suggested regulation will continue to foster innovation and growth, while ensuring integrity of the underlying market.
At the end of the day, it is inevitable that blockchain innovators will need to work in alignment with regulation to foster growth and adoption. With transparency and integrity being a key foundation of the blockchain movement, the only stakeholders in the blockchain industry who should be concerned after this hearing are the bad actors in the space.
One of the discussion points by the head of the CTFC was how this technology could have been used in avoidance of the financial crisis. “What a difference it would have made on the eve of the financial crisis in 2008, if regulators had access to real-time trading ledgers of large Wall Street banks, rather than trying to assemble piecemeal data to recreate complex, individual trading portfolios”.
Anyone familiar with the legacy of Satoshi will hear the underlying echoes of the title quoted and embedded into the very first transaction ever to be included in the Bitcoin blockchain – “Chancellor on Brink of Second Bailout for Banks”. Who would have thought that less than 10 years later, one of the inspirations for bitcoin and blockchain technology would be acknowledged as a potential use case by the US senate. Wherever Satoshi is, I’m sure he’s smiling.