Last week, on Wednesday 30 November, the Chairman of the US Senate Banking Committee, Mr. Sherrod Brown, called on Treasury Secretary Ms. Janet Yellen to work with lawmakers and financial regulators to help draft legislation that would rein the cryptocurrency market as a result of the collapse of the FTX crypto exchange. Currently, apart from sharp political discussions, another dispute has flared up in this highest legislative body of the USA, the Senate. This time it is regarding the regulation of the cryptocurrency market.
Senator Brown, D-Ohio, told Ms. Yellen in a letter to incorporate the Financial Stability Oversight Committee’s recommendations, including legislation that would “create authorities for regulators to have visibility into, and otherwise supervise, the activities of the affiliates and subsidiaries of crypto asset entities,” with financial regulators such as the Securities and Exchange Commission and the Federal Reserve Board. All these and other initiatives not only from senators, but also congressmen from the US House of Representatives caused even more concern not only about exchange rate losses, but also about the role of cryptocurrencies in the economy. There was a significant decrease in the exchange values of cryptocurrencies, especially in connection with the collapse of FTX, when even the most widespread cryptocurrency Bitcoin (BTC) experienced a noticeable decrease. On Wednesday, 7 December 7:15 am CET this virtual currency was trading on the Coinbase cryptocurrency market at US$ 16,988.50 per BTC, with BTC down -0.03%.
Bitcoin is an internet open-source P2P payment network and also the cryptocurrency used in this network. Bitcoin’s main uniqueness is its full decentralization; it is designed so that no one, including the author or other individuals, groups or governments, can influence the currency, falsify, confiscate accounts, control cash flows or cause inflation. There is no central point in the network, and no one can make decisions. The final amount of bitcoins is known in advance and the release of bitcoins into circulation is defined in the network source code. There are minimal or no cost payments. The network has been operating since 2009 and it was created by a group of people known as Satoshi Nakamoto. According to cryptocurrency analysts Bitcoin is the only medium of exchange that can offset central banks printing money.
A special database that stores an ever-increasing number of data – called a blockchain – serves as bitcoin’s ledger. The online database is protected both against unauthorized outside interference and from the users themselves. The final amount of bitcoins is known in advance and their release into circulation is defined in its source code. A unique feature of bitcoin is its complete decentralization. It is designed so that no one, not even its author or other individuals, groups or governments, can influence, counterfeit, confiscate accounts, control cash flows or cause inflation. Bitcoin is completely independent of traditional currencies, its value depends on the confidence that it will be possible to pay with it in the future as it does today. The value of bitcoin is based purely on supply and demand on the market, in short-term sections the exchange rate is characterized by sharp price fluctuations.