DeFi advocates have argued against imposing strict, anti-innovation rules on the emerging digital asset industry.
At a hearing of the US House Financial Services Committee Titled “Decoding DeFi: Analyzing the Future of Decentralized Finance,” a number of DeFi advocates testified to protect the sector from stricter rules focused on anti-money laundering and the introduction of full surveillance of web3 users.
Cryptocurrency skeptics like Rep. Bill Foster and other Democratic members of Congress have argued that DeFi developers should be held accountable for criminal uses of blockchain technology.
Rep. Foster and other anti-DeFi lawmakers have reiterated proposals to tighten the regulatory noose around cryptocurrency activity. Specifically, committee members have highlighted the Treasury Department as the best agency to enforce stricter anti-money laundering rules and go after blockchain code writers.
US lawmakers have also questioned the alleged use of blockchain technology as a tool for tax evasion. Peter Van Valkenburgh, research director at the Coin Center, strongly disputed the claim.
Van Valkenburgh argued that evading regulators using a public, transparent, decentralized ledger, known as a blockchain, was difficult because anyone could examine transactions. Additionally, lawmakers in the so-called cryptocurrency bloc echoed Van Valkenburgh’s sentiment, noting that criminals were more likely to use legacy financial systems to move billions to trillions of ill-gotten wealth.
DeFi Talks Heat Up
Since the advent of cryptocurrencies, U.S. policymakers have generally viewed the Web3 community as a wild, fraud-filled West. However, the conversation around DeFi has gained momentum in Congress and with some of the biggest financial names, like BlackRock. Proponents have suggested that political headwinds have shifted in crypto’s favor.
Coinbase CEO Paul Grewal said that Americans will elect a pro-crypto Senate, regardless of who wins the presidential election.
Bitcoin (BTC) and blockchain have also been hot topics in the race between Republican nominee Donald Trump and Democratic nominee Kamala Harris. Former President Trump has promised to support the industry and establish America as the crypto capital of the world. However, there are doubts about Trump’s ability to deliver and actual concerns about the industry.
Similarly, the industry has a complicated relationship with a potential Harris administration. The current vice president has accepted crypto donations via Coinbase and is said to have reached out to industry leaders, but Harris’s stance and approach to crypto leaves much to be speculated.
However, cryptocurrency heavyweights, such as Ripple co-founder Chris Larsen, have endorsed Harris for president.