







In the fast moving world of blockchain, regulators are often seen as the bad guys. They can slow innovation or imperil an entire industry, like China's blanket ban on initial coin offerings last September.





But a Congressional hearing on cryptocurrencies yesterday should give blockchain enthusiasts reason for hope, at least in the US. The hearing, which was organized by the House Committee on Agriculture, invited six blockchain experts, including entrepreneurs, lawyers, and investors, to voice their opinions on the merits of blockchain and how the government should regulate it.





With the exception of a few committee members, most were positive yet cautious about the benefits of blockchain, especially in the private sector, and were keen to educate themselves about the technology. This is a good sign for the industry.





“I think the important thing is we don’t want to stifle the imagination, the entrepreneurship, and the development of this, yet we want safeguards in place,” said Ted Yoho, who represents Florida in the US House of Representatives. “We just want to make sure that when people get involved in it that their investments are protected.”





Of course, it was clear during the two-hour long session that many committee members weren’t crypto or even tech-savvy. One said that in an attempt to understand blockchain technology, he and his wife watched a documentary on Bitcoin and were left “more confused.” Another commented: “I’m a flip phone guy in a Bitcoin world.” Still, everyone seemed to recognize that they needed to understand the technology in order to regulate it responsibly.





"There's a balance," said Stacey Plaskett, who represents the Virgin Islands in the US House of Representatives. "We don't want to over-restrict something that we don't really understand or that's developing.”





The downsides of cryptocurrency and blockchain also came up multiple times during the hearing, such as ICO fraud, hackers, criminal activity, and the overwhelming percentage of Bitcoin held by a few so-called “whales.”





But overall the US government demonstrated significant support, even advocacy, for blockchain technology. Daniel Gorfine, director and chief innovation officer at LabCFTC, the US Commodity Futures Trading Commission’s support and promotion body for fintech, said in his testimony: “We all have the shared goal to bring clarity and certainty to the market, but also need to be sure that we are thoughtful in our approach and do not steer or impede the development of this area of innovation.”





“Indeed, while some may seek the immediate establishment of bright lines, the reality is that hasty regulatory pronouncements are likely to miss the mark, have unintended consequences, or fail to capture important nuance regarding the structure of new products or models,” he added.





This doesn’t mean that US regulators won’t crack down on areas like ICO fraud, but the government is clearly wary of overstepping its bounds. Most important, US regulators are willing to learn more about crypto. For those who work in the blockchain industry, that's a great start.



