Congress gets a crash course on cryptocurrency

The chief executives of six cryptocurrency companies will testify on Wednesday before the House Financial Services Committee about the promises, perils and uses of stablecoins, or cryptocurrencies that are pegged to the value of stable assets such as the dollar.

They include Brian Brooks, the former acting comptroller of the currency under President Donald J. Trump and now the chief executive of the blockchain technology company Bitfury Group; Sam Bankman-Fried, the chief of the crypto exchange FTX; Alesia Haas, the chief of Coinbase’s exchange in the United States; and Jeremy Allaire, the chief of the payments company Circle.

Key to transactions in volatile crypto markets, the market capitalization of stablecoins reached almost $147 billion as of November, a more than 500 percent increase over the previous 12 months, according to the committee’s hearing memo. But they have so far proved not to be backed as stably as some issuers have claimed, raising concerns about a digital bank run that could threaten the wider economy, given current growth rates. Financial regulators last month asked Congress to “act promptly to enact legislation” that addresses these risks.

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