Congressman takes aim at peers who think crypto could cause a ‘financial 9/11’

Published at: July 30, 2021

Representative Ted Budd of North Carolina, a member of the House Financial Services Committee and Congressional Blockchain Caucus, has urged lawmakers to embrace decentralized innovation.

On what appears to be the first occasion in which a publicly elected official has met with a decentralized autonomous organization (DAO), Budd acknowledged the increasing concern about crypto among lawmakers while speaking to MakerDAO’s Chris Cameron on Thursday.

“There are some on the Senate side and some on the House side which fear, especially when it comes to currency, the blockchain, decentralized finance and how it’s going to evolve,” he said.

“The fear is whether it will hurt our national sovereignty? Will it destabilize the dollar? Is it a threat to national security?" he added.

“You even have some in the House that sit not too far from me on the House Financial Services Committee that would call blockchain basically a financial 9/11.”

Budd characterized his peers’ concerns as short-sighted, warning that rivals of the United States could benefit if local lawmakers take a hostile and exclusionary stance regarding digital assets.

"I think we need to be very open to this. We need to make the US the place where this technology flourishes,” he said.

“It’s a new technology that’s going to evolve and I’d rather evolve here in the U.S. than in Singapore or in Estonia, or other nations that could be hostile to the U.S. […] I’d rather it be on our shores.”

Responding to a question from Cameron asking how a decentralized entity can better engage lawmakers, Budd acknowledged that many decentralized projects “don’t know who to call” to reach out to regulators. 

“There’s a lot of innovation, but there’s also maybe not coordination when it comes to government affairs,” he noted.

Budd urged DAOs to reach out and schedule meetings with lawmakers, but warned: “I would come and not do tech-speak to these folks.”

“If you can explain it really clearly, ask how they think about these things. Propose the questions ahead of time, we are pretty accessible.”

Related: Western nations need better public-private cooperation on crypto, says Mohamed El-Erian

The conversation came as stablecoins face increasing scrutiny from lawmakers, with U.S. Treasury Secretary Janet Yellen calling for greater regulatory oversight of the stable token sector during a July 19 meeting of the President’s Working Group on Financial Markets.

On Tuesday, acting comptroller of the Currency, Michael Hsu, announced ongoing investigations scrutinizing the purported commercial paper reserves of the largest stablecoin by market cap, Tether (USDT).

Tags
Regulation
United States
Cryptocurrencies
Dao
Stablecoin
Makerdao
Related Posts
Fear of the unknown: A tale of the SEC’s crusade against synthetics
On the opening day of Messari Mainnet 2021, New York City’s long-awaited first crypto conference since the start of COVID-19, reports came blazing in via a viral tweet that the United States Securities and Exchange Commission had served a subpoena to an event panelist at the top of an escalator in broad daylight. While it’s still not entirely clear who was served (or why), this isn’t the first time the SEC has encroached upon the crypto industry in full view of the public. Let’s go back a mere two months. On July 20, 2021, SEC Chair Gary Gensler issued his …
Decentralization / Oct. 23, 2021
US Treasury reportedly in talks for stablecoin regulation
Amid massive growth of the stablecoin market, the United States Treasury Department has reportedly discussed potential regulation for private stablecoins. The Treasury conducted several meetings last week to examine the risks of stablecoins for users, markets or the financial system as well as to learn about their benefits and consider potential regulation, Reuters reported on Sept 10. “The Treasury Department is meeting with a broad range of stakeholders, including consumer advocates, members of Congress and market participants,” Treasury spokesman John Rizzo said. Citing three anonymous sources familiar with the matter, the report notes that one of the Treasury’s meetings took …
Regulation / Sept. 13, 2021
SEC Chair wants robust crypto regulatory regime for the US
Gary Gensler, chairman of the United States Securities and Exchange Commission, is reportedly keen on bright-line regulations for the country’s crypto space. Gensler expressed the SEC’s desire to install safeguards for crypto investors in the U.S. in a Bloomberg interview, stating, “If somebody wants to speculate, that’s their choice, but we have a role as a nation to protect those investors against fraud.” The SEC chairman identified seven crypto-related policy changes currently being examined by the Commission. These include matters concerning token offerings, decentralized finance (DeFi) and stablecoins. Other focus points for Gensler’s SEC are custody, exchange-traded funds (ETF) and …
Bitcoin / Aug. 3, 2021
Report: Libra Stablecoin Tied to Major Fiat Currencies, Excluding Yuan
Social media giant Facebook, which is currently trying to get regulatory approval for its Libra stablecoin project, reportedly shared details regarding the project’s proposed backing reserves. According to a report by Bloomberg on Sept. 9, Facebook told United States senators about the backing reserves for the stablecoin — a type of cryptocurrency valued by a reserve currency, commodity or algorithm. Libra is backed by major national currencies Libra will reportedly be backed by several national currencies. These include the U.S. dollar, euro, Japanese yen, British pound and Singapore dollar. However, the Chinese yuan may be excluded from the group of …
Regulation / Sept. 9, 2019
Fed chair Jerome Powell says he isn't concerned about crypto disrupting financial stability in the US
United States Federal Reserve chair Jerome Powell hinted that though the government agency should consider monitoring developments in the crypto space, he didn’t see cryptocurrencies as a financial stability concern for U.S. markets. Addressing a question on crypto from Michael Derby of the Wall Street Journal on Tuesday, Powell supported the conclusions of a report from the President’s Working Group on Financial Markets released on Nov. 1. The report proposed that stablecoin issuers should be subject to “appropriate federal oversight” akin to that of banks, legislation that was “urgently needed” to address risks. “Stablecoins can certainly be a useful, efficient …
Regulation / Dec. 15, 2021