Cryptocurrencies
A cryptocurrency coalition plans to address the concerns of lawmakers with the help of lobbyists and the payment to them would be made in both cash and in cryptocurrency tokens. Here, litecoin, ripple and ethereum cryptocurrency 'altcoins' sit arranged for a photograph in London, April 25, 2018. Jack Taylor/Getty Images

As cryptocurrencies face a growing threat of government regulations, financial technology companies are coming together to lobby regulators and lawmakers in the Congress and agencies like the Securities and Exchange Commission (SEC). A coalition of fintech firms announced Thursday they intended to bring in government supervision in the rapidly changing global market that would encourage innovation without hindering competition.

Toward achieving that goal, the Securing America's Internet of Value Coalition also announced it would employ services of bipartisan strategists and public policy firm — the Klein/Johnson Group, located in Washington, D.C. The coalition would pay Klein/Johnson about $25,000 every month, as well as 10,000 XRP, the cryptocurrency token based on the Ripple blockchain.

Izzy Klein, cofounder of Klein/Johnson, said his firm would convert the XRP payment into dollars when it discloses the payments on federal lobbying forms, a process that requires filing of a form for each payment or agreement, to make payments to any lobbying entity for influencing or attempting to influence an officer, member, or employee of Congress or the agency.

Ripple, the currency exchange company and remittance network created by Ripple Labs, is also a part of this coalition which comprises several startups, all based in San Francisco.

"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," Klein said, Business Standard reported.

The companies' decision to form this alliance comes as the Congress and SEC are yet to figure out the kind of legal framework that should be applied to cryptocurrencies and its underlying technology, blockchain. The major roadblocks that are preventing the lawmakers from drafting a concrete legal framework are their concern regarding massive price swings in the cryptocurrency markets, a series of fraudulent public offerings involving the cryptocurrencies, and cryptocurrency use in criminal activities.

The new group that intends to address the lawmakers' concerns says its name — Securing America’s Internet of Value Coalition — is "a nod to an emerging notion in the financial technology world where the systems that record digital transactions will all be connected."

The coalition also said it would be difficult to explain to policymakers the concept of enabling payments across the globe to be processed almost instantaneously with no middlemen and how it could be revolutionary — which is something cryptocurrency and blockchain contribute to.

“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," Chris Larsen, executive chairman of Ripple, said, adding it made him feel better 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 said.

Along with Ripple, the coalition also includes Coil, a company that facilitates digital payments for entertainment and content, Hard Yaka, an investment firm focusing on digital assets, and PolySign, a startup that is looking to be a crypto custodian.

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