One of the essential topics for crypto in 2022 will be regulation. Several governments worldwide have already introduced regulations, from complete bans like China to more crypto-friendly frameworks. But most eyes will be focused on the United States. At the beginning of December, they had an important Congressional hearing. So what did we learn from it?
Big players represent crypto
The US Congress hearing was organized to give lawmakers more insight into what crypto is all about, eventually to develop laws and frameworks that protect consumers but stimulate innovation. However, finding the balance between the two is difficult as too strict regulations can restrict the development of the crypto space.
Big crypto players represented the American crypto sector during the hearing. These were the leaders of stable coin issuers Circle, Paxos, the exchanges Coinbase and FTX, Bitfury, and the Stellar Development Foundation. It seemed that especially stable coins are in the lawmaker’s visors.
Several stable coin issuers are scrutinized as it is not always clear what their reserves look like. Some of them issued billions of dollars worth of stable coins while their reserves remain opaque. A digital bank run could mean these companies collapse with severe consequences for the rest of the crypto market. Therefore, Congresswoman Nydia Velázquez asked Paxos and Circle to make sure their reserves only consist of Treasury bills or cash before meeting the federal standards. Both CEOs agreed with this.
Also, exchanges were an important topic during the hearing. Both the executives of Coinbase and FTX supported harmonizing regulations for exchanges. It is often unclear how US regulations impact them and their products and services. All in all, a significant step forward for the US and global crypto industry.
Why regulations are essential for bitcoin miners
While bitcoin and crypto mining was not a topic on their own during the hearing, regulations are still necessary to watch as a miner. Of course, stricter taxes or energy consumption laws directly impact your operation. But regulations can also have a positive impact.
A better and clearer framework for the crypto mining industry can stimulate further growth and innovation. In addition, it can help incentivize miners to use more durable energy sources, helping society make these sources more economically viable. And, of course, the overall adoption and acceptance of crypto in the US can significantly boost the adoption of crypto, ultimately giving a boost to the crypto mining sector.