Inaugural Congressional Hearing About DeFi Takes Place

U.S. House lawmakers recently held the first-ever Congressional hearing on decentralized finance (DeFi). The House Financial Services Committee met with industry experts to discuss the future of digital assets and blockchain technology.

Crypto has also become a key point of discussion for the upcoming United States Presidential Elections, where both Donald Trump and Kamala Harris have expressed their views on the subject. While Harris remains skeptical about Bitcoin (BTC), Trump aims to fully embrace the digital asset, with his son recently announcing his very own cryptocurrency project.

Mixed Opinions

The House Subcommittee on Digital Assets, Financial Technology, and Inclusion organized a session titled Decoding DeFi: Breaking Down the Future of Decentralized Finance. Chair French Hill, R-Ark., stated that the hearing aimed to explore emerging financial topics like tokenization and blockchains.

Not all lawmakers shared the same enthusiasm as Hill however. Some Democrats, including Rep. Brad Sherman, D-Cali., questioned what utility DeFi could possibly have, suggesting it might primarily facilitate tax evasion for the wealthy.

Regulatory Concerns

What Sherman had to say did not sit well with everyone, as his remarks led to a rebuttal by Peter Van Valkenburgh, director of research at Coin Center, who attributed non-compliance in the crypto sector to unclear regulations. Van Valkenburgh emphasized that clearer guidelines could help users better meet tax obligations.

The hearing also highlighted various DeFi risks, such as fraud. Rep. Maxine Waters, D-Cali., noted a recent scam involving the World Liberty Financial project, where fraudsters used hacked social media accounts to promote a fake token, leading to losses of $1.8 million by about 2,000 people.

The hearing, featuring five industry experts, lasted about 90 minutes. Lawmakers will remain in session until September 27th before breaking for the election recess. With the September 30th funding bill deadline approaching, discussions on DeFi and blockchain regulation are expected to continue.