In today's digital economy era, the rapid development of blockchain technology has brought unprecedented challenges to financial regulatory agencies. As a global financial center, the United States’ regulatory agencies have been exploring how to effectively supervise the blockchain industry, especially on the issue of stable currency. This article will delve into the essence of the U.S. hearings, revealing key measures to regulate the blockchain industry and strategies to deal with stable currency challenges.

Regarding the regulation of cryptocurrency, the Democratic Party and the Republican Party generally focus on two directions: Democratic lawmakers focus on the lack of regulations to protect investors in the digital asset market, and the excessive volatility of cryptocurrency, which may endanger financial stability.

Financial Services Committee Chairman/Democratic Congresswoman Maxine
Waters is worried about investor protection. She believes that currently, the cryptocurrency market does not have a unified and centralized regulatory structure, which makes investments in the digital asset field vulnerable to fraud and price manipulation.

In addition to Maxine Waters, Democratic Congressman Al
Green also raised the same question: In the past year, the market value of the crypto market has grown from 500 billion US dollars to 3 trillion US dollars, but the market volatility is still very large; there seem to be many potential factors that form a bubble, such as it is easy to accept credit margin trading , transaction opacity, and asset transparency issues, (I would like to ask) is there any moment in the future when we need to worry about a bubble?

In response to questions from Democratic lawmakers, FTX founder Sam Bankman-
Fried said that one of the important features of the crypto market is 24-7 non-stop trading. There will be no overnight liquidation risk or liquidation risk after weekends/holidays like traditional financial markets. Large exchanges like FTX can clear and monitor these transactions in real time; in addition, while FTX accepts user margin transactions, users need to mortgage crypto assets.

“Another thing I want to say is that during the 2008 financial crisis, you could see that there were many transactions between financial entities that were not disclosed, but these transactions were packaged and leveraged again and again. No one knows how much risk there is until the bubble finally bursts. If you compare the above situation with the cryptocurrency market, FTX or most mainstream exchanges can fully understand the risks of these unsettled futures transactions, and the information is transparent. Moreover, the complete clearing structure can control risks, and we are also working with the CFTC to bring this system to FTX.US for use by American users."

In contrast, Republican congressmen are more concerned about whether blockchain technology can reduce the cost of financial services, whether the operation of decentralized networks may usher in the Web 3.0 era, and whether the information rights monopolized by the rise of technology giants can be restored. Power to the people.

Regarding this point, Brian, the former acting director of the OCC of the U.S. Office of the Comptroller of the Currency and current CEO of Bitfury
Brooks described the early web as a carefully designed garden, a walled garden that was not designed to allow users to interact. Today's Web 2.0 allows users to create their own content. The next Web3.0 is to allow users to actually have control of the network. This is the function of cryptocurrency.

**How to regulate the blockchain industry? **

In this hearing, members of Congress were naturally very worried about the investor protection issues brought about by the current or future encryption industry, and executives of encryption companies have been explaining that the transparency and transaction monitoring of the blockchain are sufficient, so the problem Still have to go back to how to supervise.

Most crypto executives at the hearing seemed to believe that cryptocurrencies do not currently fit into the existing U.S. financial regulatory structure and that lawmakers should consider tailoring regulatory laws to the crypto industry.

Coinbase Chief Financial Officer Alesia
Haas stated in his testimony: Due to the unique underlying technology of cryptocurrency, and considering that the industry is still in its infancy, digital assets and traditional assets are actually traded in different markets, so the existing regulatory system is not adapted to this technology.

FTX founder SBF suggested that Congress could pass legislation to grant the main regulatory power of the encryption industry to a single federal regulatory agency. FTX has previously issued the "Market Supervision Principles". It said: FTX proposes to allow the encryption market platform to choose one regulatory agency to serve as the main regulatory agency to unify spot and derivatives and comply with the cooperation framework, while the other serves as a second-level regulatory agency to maintain influence on the encryption platform, but Does not assume day-to-day supervision responsibilities.

In addition, the SBF also expressed its welcome for stricter supervision of the spot market of Bitcoin or cryptocurrencies.

"I'm not worried about more regulation. I think that in areas with insufficient regulation, strengthening regulation will be very positive in protecting consumers and building a strong ecosystem."

**Stablecoin Issue**

In addition to transaction supervision issues, another major focus of the hearing was stablecoin regulations. The Biden administration recently released a stablecoin report, which recommended that Congress pass legislation requiring federally regulated banks to issue stablecoins.

In this regard, Danelle Dixon, CEO of the Steller Development Foundation, said that this report does analyze risks and regulate them in a compliant manner, but the solution is still too far away.

Danelle Dixon said: On the contrary, we propose another regulatory approach, through regulation requiring 100% reserve of stablecoins and appropriate asset reserves to control risks.

Danelle Dixon’s response also echoed that of Circle founder Jeremy
Allaire's opening testimony. He mentioned that the proportion of stablecoins in institutions and new start-up industries is expanding. This is because stablecoins reduce the cost of international transfers for small businesses and speed up transfers. He believes that the regulation of stablecoins can move towards qualification requirements for issuers.

“On the regulatory front, we have a lot of work to do, including defining issuer reserve requirements, liquidity and capital requirements, as well as risk management and operational resilience requirements.”