Garlinghouse is “cautiously optimistic” about a crypto regulatory framework in 2023.
Ripple chief executive officer Brad Garlinghouse in a Twitter thread yesterday, expressed cautious optimism that the US Congress will deliver on a crypto regulatory framework in 2023.
Today is the first day of the 118th Congress. While prior efforts at regulatory clarity for crypto in the US have stalled, I am cautiously optimistic that 2023 is the year we will (finally!) see a breakthrough. A thread on why…
— Brad Garlinghouse (@bgarlinghouse) January 3, 2023
Garlinghouse pointed out that Congress is not starting from scratch, as different groups have submitted bills covering different aspects of the emerging industry. Conceding that no bill is perfect, the Ripple chief warned that, in this instance, waiting for perfection could prove costly, as Singapore, the European Union, Brazil, and Japan have already established clear rules for the crypto industry.
According to Garlinghouse, the lack of regulatory clarity is pushing businesses abroad, often to places with lax rules, citing FTX as an example of possible outcomes. While the Ripple chief accepts that Congress has a herculean tax, he asserts that it is the right thing to do for Americans who continue to be interested in crypto.
“The 118th Congress has a historic opportunity before it to ensure the US remains an innovation leader for decades to come,” Garlinghouse surmises. “We hope it’s one they take.”
Notably, in a separate thread, Ron Hammond, director of government relations at the Blockchain Association, asserted that the current perception of the crypto industry in Congress is “bad.” According to the Blockchain Association director, the collapse of several crypto entities in the past year, particularly revelations of Sam Bankman-Fried’s fraud, have eroded trust and set the industry back.
Recall that the disgraced crypto founder was a frequent guest of Congress and a major political donor. Revelations of fraudulent activity costing customers billions of dollars have put the source and intent of his donations under scrutiny, forcing members of Congress he supported to return or donate received campaign donations.
Hammond notes that skeptical congress members who equate FTX with the rest of the crypto space now believe that creating regulations will only help to legitimize the crypto space, which they do not want. However, the Blockchain Association director points out that in the wake of the FTX collapse, political pressure may still force Congress to spring into action, citing precedence with bills passed in the wake of other financial scandals.
Consequently, Hammond believes that “if” lawmakers do so, it would likely be a mix of new and old bills. However, he has asserted that FTX fact discovery will take precedence.
Despite the current setback, Hammond has expressed faith in the industry’s lobbying efforts saying, “crypto has a strong bench in DC.”