In the meeting of the House Financial Services Committee, subcommittee on Capital Markets, Securities and Investment, members of the Committee inquired from the experts about the latest technological innovation taking place in the financial world. The meeting titled “Examining the Cryptocurrencies and ICO Markets” was held on 14th March this year.
The primary purpose of this meeting was to educate the nation’s legislators about the new innovation in finance or new method capital formation such as cryptocurrencies. The meeting took place in the backdrop of rising concerns among the Fintech community on the possible law making that is expected to have devastating effect on the ongoing technological breakthrough in the financial sector.
In this regard the Liquid M CEO Vince Molinari told the Committee in his testimony; “We believe it is critical for regulators to foster the value of innovation in Fintech without stifling it through unclear regulations.”
He further emphasized on the modernization of the existing laws as he believes that the present regulations have higher compliance costs for the start-up firms. He opined that no one is against the regulation, however, he maintained that the current regulatory measures are myopic and biased against the digital assets of the firms.
He also reminded the law makers that in past the Congress had amended laws in response to changes in the markets. Therefore, it is incumbent on the congress that the amendments ought to be made keeping in view the current developments in the digital assets.
Although, some guidance has been provided to the industry on the issue of the recognition of digital assets as securities, but such regulations do not fully address the needs of the financial services industry. Therefore, there is a need for a comprehensive policy that foster competition and innovation. Present policies fared well for the capital markets since their enactment in 1930s, but that era is long gone.