What will be the outcome of the congressional hearing between heads of crypto companies and congress?

Several executives of cryptocurrency exchanges participating in a congressional hearing with the US House financial services committee, Robinhood’s chief legal officer has said he doesn’t expect there to be any significant crypto legislation any time soon.

A crypto congressional hearing  led by Republican Representative Maxine Waters took place on Wednesday between the House Financial Services Committee and heads of six crypto companies.The hearing comes on the back of the US government’s efforts to understand the fast-growing digital assets and how best to regulate them. 

With six CEO's of crypto exchanges participating in the hearing, including head of Paxos, Charles Cascarilla, and chief of the crypto exchange FTX, Sam Bankman-Fried, the hearing marks a positive step from lawmakers as they include lobbyists  in their efforts to regulate the crypto industry.

In an interview with CNBC, Robinhood’s chief legal officer Daniel Gallagher commented on the actions that congress is expected to take when they make moves to regulate cryptocurrency in January. 

“It's a stretch to believe that there will be legislation coming out on crypto anytime soon.” Gallagher commented.

He added:

“These conversations are, theoretically, existential to crypto, but one would have to assume that Congress is actually going to act and legislate,” he told CNBC.

Nonetheless, many, including Gallagher, are skeptical about the effectiveness of these kinds of meetings and their impact on the speed at which regulation will be created. There was pushback from democrats in the hearing, who were concerned about the risks that crypto poses. 

Representative Alexandria Ocasio-Cortez asked Jeremy Allaire, the chief executive of the payments company Circle: “What do you say to the folks that say this doesn’t seem like a new financial system per se but an expansion of the old one?”, who replied “I really do believe we are building a new global economic infrastructure layer,” noting that crypto has to be integrated with traditional finance, and form  “a hybrid model.”