Supporters of cryptocurrency believe it is a safe and efficient modern payment method, but regulators are concerned about potential risks to financial stability. At the very least, Congress’s increased focus on the regulation and enforcement of cryptocurrency and big tech clearly reflects how entrenched and important these assets have become.
U.S. Representative Patrick McHenry, Republican Leader of the House Financial Services Committee, explained to Karen Webster, CEO of PYMNTS, the challenges of navigating the political landscape of digital currencies and his concerns about Big Tech regulation.
On the regulation of cryptocurrency
âWith the recognition that the existing regulatory regime has worked well so far, but for us to be the leader of the next generation of internet technology, we need a new regime built around the nature of digital assets – the Current law and existing regulatory structures do not match the unique nature of these assets, âsaid McHenry of North Carolina.
As a strong supporter of the notion of the internet of money, McHenry said regulators in Washington lack the legal authority to do things that the chairman of the United States Securities and Exchange Commission, Gary Gensler, claims. He believes that regulators need to have a better understanding of the technology defined under the Federal Digital Assets Act and understand its effects and implications on the financial space to establish an appropriate regulatory regime based on the unique characteristics of digital assets.
“Congress must define [the framework for digital assets]. It’s in the nature of oversight of the law, not in the nature of oversight of current regulators, âMcHenry said when asked about the authority responsible for developing and classifying the framework.
He explained that the current state involves less informed policy makers trying to legislate in a rather complicated area. The infrastructure bill passed by the Senate in July highlighted that the House of Representatives has a poor definition of digital assets. Coupled with the non-commissioner regulatory and tax regime, he fears that this is a problematic situation.
See also: SEC Gensler Warns $ 2 Million Crypto Space Needs Oversight To Survive
McHenry believes that adopting such a regulatory regime would be very damaging to the technology. He wants to make sure that policymakers are smart about it and reward and encourage innovation, not destroy it.
âIf we see any regulation coming out of this Congress in the next three months, it will be horrible. A slow and orderly process is needed here so that we can drive innovation and remain a global leader in technology, âsaid McHenry.
See also: From taxes to trade, federal review of crypto regulation is on the rise
On the regulation of major technologies
“I would rather the global Internet giants were American companies rather than Chinese companies,” McHenry said when asked if the Chinese government’s crackdown and “obstruction” of Big Tech seem oddly familiar to the tone and tenor of Congress.
The innovative capacities that the big tech giants have established and engendered in the United States have a lot to attribute to the American capitalist system. However, it is concerning that both sides on Capitol Hill repeatedly make bad proposals regarding big tech that can have long-term detrimental effects.
See also: Attorneys General Call on Congress to Regulate Big Tech
Expressing his concerns, McHenry said political discussions have superimposed the regulatory and legal structure in this case. Referring to the last presidential campaign, he said the debate around what was allowed to be on Facebook or Twitter had overlaid what should have been more focused attention on the rules-based regime for these entities.
“I hope that in the long run cold heads prevail and that we can do smart things to encourage and foster competition rather than throwing a hammer at the biggest growth engine we’ve seen in the past.” generation, namely technological development and innovation, âsays McHenry.
Access to credit for SMEs
PYMNTS data put the dollar volume of unpaid supplier receivables at around $ 3.1 trillion on any given day of the week in the United States, with 30% of that being paid late, often more than a month beyond the conditions that had been established between the buyer and the supplier. Due to their size and the high percentage of transactions they represent, small and medium-sized enterprises (SMEs) are particularly vulnerable to the financial impacts of this situation.
To limit the consequences of late payments, SMEs tend to offer up to 4.8% discounts just to get paid on time or earlier in the process, a concession that further complicates the problem as it becomes costly for them. SMEs to become the creditors of large companies who can pay them earlier.
âHaving a report of this magnitude raises awareness and advances the public policy discussion,â said McHenry.
The small business committee at the federal level focused on access to capital, especially for small businesses. McHenry believes hearings are needed to better understand the problem and determine what can be done to close the gap and help small businesses get the resources they need to survive and thrive.
âIt is a well-known precept that large companies will demand extraordinary conditions from their [often smaller] Suppliers. We know that, but having the data is the most powerful thing for us to do about it. And [PYMNTSâ] report gives us this ability to take a deeper look at the things we can do to combat this, âMcHenry said.