Facebook’s Libra Prompts US Congressman to Call for Whole New Cryptocurrency Regulatory Framework

McHenry argues that the United States risks being left behind if it does not develop an entirely new regulatory framework to govern cryptoassets. Appearing on CNBC’s “Squawk Box” segment earlier today, North Carolina Congressman Patrick McHenry addressed the need for U.S. regulators to move faster with regards the ever-expanding cryptoasset industry. He argues that it is vital for regulators to understand the opportunities presented by this new technology — as well as any potential costs. McHenry states that the House Financial Services Committee has a lot of questions for the social media firm:

“We don’t know anything. We know about a whitepaper, we know about a consortium, we know about pledges of money, we don’t know the nature of the technology.”

The Congressman goes on to state that regulators have no idea how Libra will comply with AML and KYC legislation in the U.S. and overseas — or if the huge volumes of user data Facebook has amassed over the years will impact company with regards the currency. Arguing in favor of a specific regulatory framework to govern the digital currency space, McHenry says the U.S. risks falling behind other nations of the world that are more advanced in their cryptocurrency legislative efforts. Entrepreneurs are increasingly favoring countries such as Malta or Switzerland to found digital asset and blockchain technology companies since they offer much greater regulatory clarity. In response to a question regarding the dichotomy between protecting the dominance of the US dollar in the world and embracing the ever-growing digital currency industry, McHenry seemed to argue that it is impossible to stop crypto assets and that therefore understanding, regulating, and embracing them was the only option. Finally, McHenry concludes that regulators in the United States have been much too slow and that the approaches of the CFTC and SEC are ill-suited for the “new invention” that is cryptocurrency. Being neither commodity nor security, the Congressman states that the industry needs an entirely new regulatory regime. What do you think? Is the United States falling behind the rest of the world in terms of blockchain and cryptocurrency regulation? Let us know your thoughts in the comments.