No pressure for the US Senate stability hearing: the two sides made deep differences. Pat Toomey explains the principles of the firm rule

On Tuesday morning, the US Senate Committee on Finance, Housing and Urban Affairs said: “Stablecoins: how do they work, how are they used and what are the risks?The topic of discussion was set by the Chairman of the Banking Commission, Sherrod Brown (D-OH) and focused on stablecoins and the entire cryptocurrency space.

Four witnesses attended the meeting.

Alexis Goldstein, Director of Financial Policy, Open Business School, Dante Disparte, Director of Circle Strategy and Head of Global Policy, Jai Massari, Law Firm Davis Polk & Wardwell, Partner LLP, Hilary J. Allen, Professor, American University Washington School of Law.

Here are the details of the audience, written by the editors.

[Chairman of the Senate Banking Committee, Sherrod Brown: Stablecoins are "magic internet money", not decentralized.]

Senate Banking Committee Chairman Sherrod Brown said in his opening speech that stable currency is "online currency" and has no distractions or uncertainties. He also noted that the rise of cryptocurrencies was "understandable" due to the lack of confidence in the big banks, but "I've heard that cryptocurrencies will democratize the economy, but it didn't work out. not yet produced, and that will not happen. ".

[Sherrod Brown: Encryption is a “massive tech scam”.]

Sherrod Brown said in a statement that the intrusion was "a major technology scam." “Our company is created by our people ... you can't lie to them,” he added. The real threat to our global reach is “administrators ignoring the warning signs”. He believed that "cryptocurrencies are a dark and dangerous monster" and compared the value of cryptocurrency in the 1920s to rising commodity prices. The “big investors” who cry out for innovation and line their pockets are not hurting. If you invest in a fixed amount, there is no guarantee that you will get it back. "

[Elizabeth Warren: Tether does not support "real money". DeFi is the most dangerous in the cryptocurrency world.]

Longtime crypto critic and Democratic Senator Elizabeth Warren has spoken out against DeFi and Stabilitycoins. He asked if the stable market could guarantee a 1: 1 return, rather than what Tether supports like “real money”. He also said: "DeFi is the most dangerous thing in the crypto world. The rules here never exist and there is, of course, a mix of scammers, scammers, investors love to invest and innovate. in the crypto industry. In DeFi, a "We don't even know if they're dealing with terrorists. Warren also believes that because of the money, stablecoins allow the DeFi ecosystem to 'live' outside of regulated markets, their value 'will increase when people need security the most', and affect the system. financial there.

[Alexis Goldstein: Stablecoins are not good for financial accounting because they are difficult to exchange and convert to cash]

Alexis Goldstein, director of monetary policy at the Open Market Research Institute, said: “At present, fixed coins are mainly used for trading rather than buying, and it is difficult to trade them and convert them into cash. Not good for financial accounting. “If you want to send it to a friend or another wallet, the cost will go up,” he said. The Defi platform does not comply with KYC (know your customers) rules or any other money laundering rules. “Stablecoins also make it easier to trade exchanges and deal with securities and loans, but most platforms don't seem to have been able to identify it. The contract is not on the sanctions list, Goldstein said of his financial experiences in 2007 and 2008:

[Jai Massari: Forcing businesses to buy bank-type insurance is “inappropriate or possible”]

Jai Massari, Partner at Davis Polk & Wardwell, LLP, a law firm representing participants in the crypto industry, says the stable coin is part of a currency exchange and we need to focus on understanding the risks and the benefits it brings. The law must resolve these two problems. . Massari said defenders should have certain restrictions in order to pay off their stable capital in the short term, as well as transparency and accountability to resolve legal issues. But forcing them to take out insurance like a bank is not worth it or not possible.

[Jai Massari: can create key licenses for stablecoin issuers]

Jai Massari said that fixed coins are a new benefit especially for fixed (interest free) payments and we should try to understand the risks and benefits of fixed coins. The management of Stablecoin must address the following risks while promoting benefits such as consumer protection, safety, security and health, and protection against fraudulent transactions. “Stablecoin traders should limit the types of assets they can accept in order to provide short-term support for those assets,” he said. to allow administrators and citizens to assess their resources. "Massari advocates the creation of political licenses for stable businesses, and expanding the role of government would also be beneficial and necessary. FDIC insurance is not a mandatory option if the trader's current assets are more than 100% of the value. equivalent of fixed income.

[Circle Chief Strategy Officer: Financial institutions use stable coins for payment and decision making]

Dante Disparte, chief strategy officer and head of global policy at Circle, said from a change perspective, fixed funds are like converting music from CDs to MP3s. "The CD and the music are always yours, but now you can take advantage of the power of user management and digital users that can run on any device, anywhere in the world," he said. -he declares. The Chairman of the Senate Banking Committee, Sherrod Brown, asked him, "Does the cycle make people think that the US government is supporting the USDC?" Disparte reported that financial services companies have used fixed funds for payments and settlements.

[Circle Chief Strategy Officer: Visa uses USDC on a network of 70 million merchants]

Dante Disparte explained how stablecoins are used in finance and earnings. Dispart said Visa uses USDC on its network of 70 million merchants and many other uses. Senator Pat Toomey also criticized witnesses who claim that fixed parts are only available for speculation, saying, "If the United States bans fixed parts, won't other countries produce and use them?" do they not? Anyone with an Internet connection can use them. " Not? He said. Disparte says, "I agree. "America needs to improve the Internet at a cost to remain competitive."

[Hilary J. Allen: DeFi doesn't do real business and coin stability puts financial services at risk]

Hilary J. Allen, professor at the American University Washington School of Law, specializes in financial security. During the hearing, he said stablecoins could pose a threat to financial aid and tax policy. “Crypto technology presents a number of new risks, including those that could allow an expert to create financial resources out of thin air. More assets means bigger bubbles. He also argued that DeFi was "uninterrupted." DeFi doesn't work for real businesses, it only benefits their leaders. Allen has opposed integrating DeFi into traditional businesses, noting that he disagrees with the board's agreement to have a stable revenue stream as a bank. He said one solution would be to ban all fixed funds, or to introduce licenses that only allow fixed deposits when it is proven that they are used for a specific purpose outside the ecosystem. Challenge. According to Allen's testimony, it does not support the integration of existing technologies with blockchain technology, stablecoins and DeFi.

[Pat Toomey: The program will be released for use in a stable financial management process.]

Crypto-favored Senator Pat Toomey said the stable coin had started to play a role in payments and was under closer scrutiny as it broke its financial position. However, stable businesses do not provide the same services as banks, so it is unwise to force them to comply with all banking rules. Toomey said he would announce the stable financial management process. He also explained how to maintain a stable part to reduce risk while protecting the business.

Fatumi (r-breath.) In the hearing, obesity.) Describe the firm name on the passage for the next amount. Tomei was said of security calls should not be limited to coverage insurance places: First, the business model of different banks; Second, all stones should be the bank fired new changes. Third, the administration of the payment is to create a fair competition. Tomerel believes the stabilization's advertisement will be selected by at least three business licenses, using the legal management designed for new coins under the new coins. Or registered the submission of the existing country, depending on the fincen federal government, telephone call. In relationships to transparent, toi said that every hotel that can be exposed to the results of organisms and equipment required to repay the payment requirements back. In addition, business organizations must be able to take a secure coin. Electrical interest rates do not have to be legal according to safety. The rules should protect personal information private, security, and privacy, including customer chooses to select third guests and information. Put electrical systems, such as a refund of the bank secret, including the needs of existing financial losses.

[Steve Daines: Business procedures should not interfere with stable coins and should not interfere too much.]

At the meeting, Senator Steve Daines spoke in favor of a firm coin on the "light" regulatory framework and urged his colleagues to "avoid too much interference, but seek consensus" on de real bipartite issues.

[Hilary J. Allen: DeFi financial systems are always affected and growth can become a threat if they keep growing]

“I don't think DeFi can develop without a stable coin,” said Hillary J. Allen, American University professor at Washington Law School. Intertwined with our traditional finances, I think there is a real threat there. "

[Sherrod Brown concludes that cryptocurrencies will be careful to ensure that the "economy is not" devastated by another crisis. "]

At the end of the meeting, Sherrod Brown said he would pay close attention to cryptocurrencies so that the market "is not damaged by other issues."