Discussions have arisen around the crypto industry and its influence on the legislative processes in the US. The threats of regulatory capture are causing concern not only among politicians but also among industry representatives themselves.
Threats of Regulatory Capture in the Crypto Sphere
Concerns about so-called regulatory capture, where regulators lean towards the interests of a narrow circle, are growing as crypto lobbying gains influence in Washington. This situation poses risks: policymakers may ignore public interests in favor of individual companies, and regulators may overlook or ignore economic threats. With the Trump administration governing the country for less than three months, concerns about regulatory capture are already sparking discussions among American lawmakers and crypto industry observers.
Influence of Crypto Lobbying
Prominent members of the Senate Banking Committee and the Committee on Finance, for instance, expressed their concerns in a March 28 letter about potential conflicts of interest related to the Trump family's stablecoin project. The letter mentions the USD1 project and raises questions about President Trump's possible influence on the OCC's decisions regarding the coin. Similar concerns arose when discussing policies surrounding the Coinbase project, whose CEO Brian Armstrong expressed a willingness to delist Tether, potentially maintaining a competitive edge for another stablecoin, USDC, in which Coinbase is a major shareholder.
What Can Be Done?
The question of regulatory capture demands answers: is it an inevitable part of the political process? Some experts propose creating special bodies to oversee regulator behavior, but such initiatives face technical difficulties and lack of political will. Ultimately, it comes down to whether the new regulations serve public interests rather than the influence of lobbyists.
Regulatory capture remains a controversial topic in US politics. Until lawmakers and regulators reach a consensus on the existence of the problem and the necessary solution, changes are unlikely.
