As cryptocurrencies face a growing threat of government and various lawmakers like the SEC regarding the regulations, the financial technology companies are getting together to form a coalition to lobby these regulators and lawmakers in the Congress and agencies like the Securities and Exchange Commission (SEC).
Announced on September 27th, 2018 the coalition called the “Securing America’s Internet of Value Coalition” aims to bring government surveillance in the “rapidly changing global market” that will encourage innovation but at the same time doesn’t hinder competition.
The fintech firms also announced they would employ services of the bipartisan strategists called the Klein/Johnson Group, located in Washington, DC., they are a public policy firm. The coalition plans to pay Klein/Johnson about $25,000 a month along with 10,000 XRP, the cryptocurrency token.
Ripple, the currency exchange company created by Ripple Labs, is also a part of this coalition which includes several startups, all based in San Francisco.
Izzy Klein, co-founder of Klein/Johnson said his firm will convert the XRP price into dollars when it reveals the payments on federal lobbying forms, a process that entails filing of a form for each payment or agreement, to make payment to any lobbying entity for influencing or attempting to influence an officer, member, or employee of Congress or the agency.
Klein told Business Standard:
“They [fintech firms] plan to weigh in with Congress as well as the SEC, the Internal Revenue Service and other agencies that touch on cryptocurrencies.”
The companies’ decision to form this agreement comes as the Congress and SEC are yet to figure out the kind of regulation that should be employed to cryptocurrencies and its underlying technology, the blockchain.
The major roadblocks that are stopping the lawmakers from outlining a concrete legal framework are their concern with:
Massive price swings in the cryptocurrency market
Series of fraudulent public offerings involving the cryptocurrencies
Cryptocurrency use in criminal activities
The new group that intends to discuss these issues with lawmakers defines itself as, “a nod to an emerging notion in the financial technology world where the systems that record digital transactions will all be connected.”
The fintech firms stated that it will be difficult to tell to the policymakers the concept of allowing payments across the globe to be treated almost immediately with no middlemen and it could be revolutionary, which is something cryptocurrency and blockchain contribute to.
Chris Larsen, executive chairman of Ripple said:
“We understand this is really complicated, and there is a lot of misinformation out there. The good news is there is a lot of interest in this topic in D.C.”
Larsen also said it makes him feel beneficial to have lobbyists, “with some skin in the game “It gives them some upside and gives them some risk.”
“Hopefully, it gives them a taste of the industry in a way that hits home,” he added.
Along with Ripple the coalition also includes:
Coil: Company that facilitates digital payments for entertainment and content.
Hard Yaka: An investment firm focusing on digital assets.
PolySign: A startup that is looking to be a crypto custodian.