Though fraud is undoubtedly an issue in the cryptocurrency ecosystem, U.S. Congressman Patrick McHenry believes lawmakers shouldn’t rush to impose new regulations.
“It’s my fear that Congress and other policymakers get wrapped up in the hype of bitcoin and feel like doing something – anything – is better than nothing,” he told CoinDesk in an interview on Tuesday, adding:
“And I get it, there’s fraud, there are bad actors, there’s irrational hysteria in the space, but a race to regulate is not the answer.”
The North Carolinian Congressman’s comments echo those made by fellow Republican Rep. Tom Emmer last month at an event in Washington, D.C., but diverge from those offered by his colleagues on the House Capital Markets, Securities and Investment Subcommittee.
During a March hearing on initial coin offerings (ICOs) and cryptocurrencies, California Rep. Brad Sherman memorably dubbed cryptocurrencies a “crock,” while Michigan Rep. Bill Huizenga declared: “This panel, this Congress is not going to sit by idly with a lack of protection for investors.”
McHenry said in the interview that such hastiness could stifle the innovative potential of the blockchain industry.
“I think there’s such a great opportunity around this technology that I think we have to be open to it and we have to have federal regulation and law that respects it,” he explained.
Hold off on new laws
Likewise, McHenry said he thinks the existing regulatory approach is working, and that it is unlikely that Congress will need to develop entirely new laws for the industry in the future.
Instead, he suggested, existing rules should be aligned with new technology.
“I think we need to take a comprehensive look at the ways this emerging technology already fits within our regulatory structure that exists today before we look at new regulations or new laws that might be needed,” McHenry explained.
Regulators like the SEC have already exemplified this with their enforcement actions, he said, noting: “There’s a structure there already and an existing law that enables them to do that.”
For now, McHenry suggests that Congress should focus on learning about blockchain, cryptocurrencies and their use cases.
As for the latter, he is particularly excited about blockchain applications to the areas of crowd-funding and payments, for which the technology “solves an enormous issue.”
“Those two things are just fantastic opportunities,” he told CoinDesk. “But there’s so many new use cases that it’s hard to keep tabs on.”