The U.S. House of Representatives Financial Services Committee held a hearing on "Decoding DeFi: Analyzing the Future of Decentralized Finance" on the 10th to explore emerging issues such as tokenization and how blockchain can be applied in the financial field. However, the hearing lasted nearly two and a half hours. Yesterday, Republican and Democratic congressmen clearly had different views on DeFi technology.
Members of both parties have different views
Cointelegraph reported that Republican Congressman French Hill, chairman of the U.S. House Financial Services Committee’s subcommittee focused on digital assets, praised DeFi in his opening remarks:
By replacing intermediaries with autonomous, self-executing code, decentralized finance can change the current structure and management of financial markets and transactions.
The Canadian government invoked the Emergency Act in 2022 to freeze bank accounts related to truck driver protesters, which was later ruled unconstitutional. French Hill mentioned that in a peer-to-peer future, the future Prime Minister of Canada will not be able to participate in protests just because of participating in protests. Freeze the bank accounts of protesters.
However, Democratic Congressman Brad Sherman, a critic of cryptocurrency, does not trust DeFi, claiming that DeFi is only used for crime, sanctions evasion and tax evasion:
What we're seeing in this area is an effort to exempt billionaires from paying income taxes.
But Coin Center research director and hearing witness Peter Van Valkenburgh countered that regulators have not yet provided sufficient guidance to the cryptocurrency industry to allow companies to comply with regulations and avoid tax evasion.
Democratic Congresswoman Maxine Waters mentioned that the X platform accounts of former US President Trump's youngest daughter Tiffany Trump and second daughter-in-law Lara Trump were recently hacked and promoted fraudulent coins, questioning the US Securities and Exchange Commission (SEC) and commodity futures trading. Whether regulators such as the Commission (CFTC) have the ability to handle the massive non-compliance of DeFi platforms and entities claiming to be decentralized to avoid regulatory compliance.
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What do expert witnesses say?
Mark Hays, senior policy analyst at the American Association for Financial Reform, described the cryptocurrency and DeFi industries as "highly volatile, full of fraud and extremely predatory, exposing investors to huge financial losses" and believed that current securities laws should apply to DeFi.
Amanda Tuminelli, legal director of the DeFi Education Fund, said that traditional finance "relies on intermediaries who often act as financial gatekeepers." Big banks can and do deny people access to the system for discriminatory reasons or without any reason, but DeFi is open , anyone with an Internet connection can access the DeFi protocol, which is a model of financial inclusion.
House members heard from five witnesses at the hearing, who were for and against cryptocurrencies and DeFi.
Cryptocurrency lawyer Jake Chervinsky commented on Twitter that he felt "emotional" after the hearing because he remembered that a few years ago, DeFi only had ten projects and no one thought DeFi would have any value. But now, the halls of power in Washington are Discuss it.
