A US Senate subcommittee held hearings on the issue of cryptocurrencies

The US Subcommittee on Monetary Policy and Trade yesterday discussed major issues related to digital currencies. It was assumed that the hearing, entitled “The Future of Money: Digital Currency,” would be significant for the introduction of crypto assets into the economy.

It was expected that such a promising title would make the hearing historic for the global adoption of crypto assets. 

However, the participants did not advance beyond the exchange of opinions and loud statements. Thus, Congressman Brad Sherman, known for controversial statements on this issue, said that Congress should prohibit US citizens from buying or mining crypto-assets, which are used to evade taxes and circumvent US sanctions. To which it received a strong response that possible criminal use should not determine the future of crypto assets as a whole.

Although much of the hearing was related to general monetary policy and the history of the cryptosphere,  the Subcommittee discussed the development of cryptocurrency and its underlying technologies, and their impact on the traditional banking system. The focus was on the creation of a digital currency of the Central Bank CBDC (Central Bank Digital Currency). A number of Central Banks around the world are exploring the idea of ​​using some of the technology concepts associated with Bitcoin and blockchain technologies as part of new, fully digital monetary systems. Opinions on this important issue are divided. The idea is that technology can improve transparency and efficiency in the banking system. A proponent of the idea, Rodney Garratt, said banks face a choice of either “abandoning the provision of payment services to the general public completely” or adopting some type of digital alternative.

In contrast, Alex Pollock criticized this approach and noted that having a central bank digital currency is one of the worst financial ideas of recent times. Pollock believes that centralized digital currencieswill only increase the bank's influence, adding that a Federal Reserve using CBDC would become the "overwhelming credit distributor of the US economic and financial system." 

The hearing was ultimately adjourned and no formal position of the Subcommittee was formulated. However, in conclusion, Chairman Andy Barr noted that there will be more and more crypto assets influence the financial system, which makes them a topic that the committee will have to discuss more than once.