Cryptocurrency assets are receiving more attention from Washington and major tech companies than ever before.
In late May, the Securities and Exchange Commission hosted a daylong fintech forum where staff and stakeholders discussed key issues and opportunities surrounding digital assets and distributed ledger technology such as blockchain, the technology behind the transfer of assets. The SEC now has a team of staffers devoted to financial technology issues, which sources said is an encouraging sign.
“The SEC having a forum where they don’t just get up and say, ‘We think all this stuff is nonsense and everyone should stay away from it,’ where they’re addressing it thoughtfully and acting as if this is an asset class that at least has the potential to become a mainstay of U.S. capital markets. I think certainly that gives (institutional investors) more comfort,” said John D’Agostino, the New York-based global leader of investor management for DMS Governance, which provides advice to investment funds. “But I don’t think it will be the primary reason to invest or not.”
In a further sign that cryptoassets have become more mainstream, Facebook Inc. announced in June plans to launch a cryptocurrency, Libra, but its implementation faces an uphill climb, according to an article from S&P Global Ratings.
“Libra resolves some of the main issues we’ve identified for cryptocurrencies as a means of exchange and store of value,” said Mohamed Damak, S&P Global Ratings credit analyst. “However, due to financial and macroeconomic stability concerns, we believe national governments may prevent the Libra from becoming a parallel source of credit creation outside central banks’ monetary policy setting.”
Libra will be backed by a reserve of real assets, initially provided by the partners that buy into Facebook’s Libra Association, including companies like Uber Technologies Inc., Lyft Inc., Mastercard Inc. and Visa Inc., according to Facebook.
In Washington, legislators have expressed skepticism toward Libra. “Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action,” said Rep. Maxine Waters, D-Calif., chairwoman of the House Financial Services Committee, in a statement.
The Senate Banking Committee will host a hearing on Facebook’s proposal on July 16 and the next day, Ms. Waters and House Financial Services Committee will do the same.
Author: Brian Croce
Read more at: https://www.pionline.com/print/washington-paying-more-attention-cryptocurrencies
