United States Senate Holds Painful Hearing on Stablecoins

Senate proves to have a gap in understanding compared to the House of Representatives, and closing that gap is crucial for the crypto industry.

Kyle Heise
December 15, 2021
Blockchain News

Banking Committee on Stablecoins Falls Flat

Just barely a week removed from a Congressional Hearing that felt like it changed the tide of crypto in Washington DC, a Senate hearing over stablecoins reminded crypto lobbyists and blockchain enthusiasts of the hard work still needed to win over the upper chamber of Congress. 

US Senators squared off in the Banking Committee hearing on Tuesday, December 14th, fielding testimony from industry representatives and banking lawyers. The committee hearing saw a pessimistic view, but the crypto community should feel some confidence knowing there are Senators out there like Senator Pat Toomey (R-PA). 

“Stablecoins can speed up payments, especially cross border transfers, they can reduce costs, including remittance remittances, and they can help combat money laundering and terrorist financing through an immutable and transparent transaction record,” Toomey stated.

Most Senators still appear ignorant, fearful, and agnostic to the immense benefits of blockchain. However, these same senators recognize the threats these coins face to the stability of US power in the world. It is hardly a miscomputation of logic on their part and a more active effort to preserve state power and monetary monopoly. 

The lessons learned from the previous Congressional hearing showed that the US dollar’s presence as the main stablecoin peg is a huge token of reassurance to the US dollar as the reserve currency. Most Senators fail to follow this logic. 

Despite the clear need for action regarding stablecoins to help cement the US Dollar as the reserve currency of the internet, the timeline of regulatory action through the US legislature still seems far away after the committee. 

The inclusion of Alexis Goldstein, Director of Financial Policy, Open Markets Institute as a witness was a misstep. At times in the meeting, it seemed like miscommunication was in the air, which proved to be a hurdle for the truth about the industry.

“What I really don't get is how someone can work for the "Open Markets Institute" but exclusively advocate for policies that close markets. Is the name supposed to be ironic?” tweeted Jake Chervinsky, Head of Policy at the Blockchain Association.

The gap for action by the US government is closing, but what is equally essential to kickstarting that action is a closing of the knowledge gap between Senators and their colleagues in the House of Representatives.

The Federal Reserve Chairman Jerome Powell indicated in his question and answer on Wednesday, Dec. 15th, that a well-regulated stablecoin market is much needed and can benefit the economy at large. 

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Kyle Heise

Born and raised in the East Bay of California. He has studied and worked on three continents and lived in eight countries. Kyle resides in San Francisco. He holds bags mostly in ETH, CRO, CAKE, and BSC meme projects.

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