At today’s sparsely-attended Senate Banking hearing on digital currencies, Chairman Crapo (R-ID) and Ranking Member Brown (D-OH) were divided on the need to develop a new regulatory framework. Sens. Crapo and Cortez Masto (D-NV) support developing a regulatory approach to allow the U.S. to lead in developing digital currencies and global rules. However, Sen. Cortez Masto suggested that lowering ATM fees and other banking system reforms might do more for equality than crypto financial services. Sen. Brown countered that digital assets often function as existing financial products and therefore fit within existing rules. Chairman Crapo is hopeful that digital currencies will expand financial inclusion and enhance consumer privacy, Sens. Brown and Schatz (D-HI) again sharply criticized Libra (see Client Report VC9). Sen. Brown also expanded his attack on Libra and big banks to call the payment system a public service or pubic good, building on a progressive-Democratic theme surfacing in concert with efforts to press the Federal Reserve to control the U.S. faster payment system. Sen. Brown also suggested that a Libra-style payment system would be akin to the gold standard even as other Democrats questions the “fully-reserved” feature of Facebook’s plans.
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