Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, gave the following statement at a full Committee hybrid hearing entitled, “Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States.”
Today’s hearing is part of this Committee’s ongoing review of digital assets. Earlier this year, I created a Digital Assets Working Group of Democratic Members to meet with leading regulators, advocates, and other experts on how these novel products and services are reshaping our financial system.
This hearing and subsequent hearings on this topic will help this Committee consider how to support responsible innovation that protects consumers and investors, safeguards our financial system from systemic risks, promotes financial inclusion, addresses environmental concerns, as well as to consider a potential Central Bank Digital Currency.
We have also held several subcommittee and task force hearings earlier this year to better understand the landscape of this industry.
At today’s hearing, which I worked with Ranking Member McHenry to organize, I look forward to engaging directly with this panel of cryptocurrency CEOs, whose companies issue stablecoins and provide an exchange to buy and sell digital assets, to understand where they think their products, services, and technologies are heading.
Americans are increasingly making financial decisions using digital assets every day. Even some pension funds are beginning to invest in cryptocurrencies on behalf of retirees, despite the track record of volatility of cryptocurrencies as investments. The pandemic has also contributed to working families looking for alternatives to rebuild their nest egg by investing in cryptocurrency.
The rapid growth of this industry has also become more visible with celebrity endorsements and ATMs that exchange cash for cryptocurrency. However, several questions remain as to how traditional rules apply, and whether regulators have sufficient authority to protect investors and consumers while maintaining market integrity and encouraging innovation.
Currently, cryptocurrency markets have no overarching or centralized regulatory framework, leaving investments in the digital assets space vulnerable to fraud, manipulation, and abuse. Some cryptocurrency market exchanges and stablecoin issuers have obtained state money transmitter and sale of checks licenses from multiple states, and at least three cryptocurrency companies have obtained conditional approval for national trust bank charters from the Office of the Comptroller of the Currency. Meanwhile, the Federal Reserve is conducting research on Central Bank Digital Currencies, and other Federal Agencies like the FDIC and NCUA have announced requests for information from the digital assets industry. The SEC is also actively utilizing its existing authorities to carry out enforcement actions against market participants.
As the prevalence of cryptocurrency grows, it has also raised environmental concerns tied to the computing power needed to mine some of the coins, which can rival the energy needs of entire countries like Sweden or Argentina. At the same time, the promise of digital assets in providing faster payments, instantaneous settlements, and lower transaction fees for remittances are areas that our Committee is exploring.
As more and more people invest in and use cryptocurrencies, the Committee will continue its efforts to look at how they are affecting many aspects of our lives and our financial system.