Ritchie Torres Pushes Back On 'Narrative' That Crypto, Blockchain Have No Uses Beyond 'Criminality'

16 hours ago

During a House Financial Services Committee hearing on Tuesday, Rep. Ritchie Torres (D-NY) spoke in support of cryptocurrency and blockchain technology.

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Transcript

00:00Thank you, Mr. Chair. No technology should be judged solely by its abuses or worst possible

00:08uses. Every technology has constructive uses and destructive uses, and crypto is no exception.

00:15Take as an example the automobile, which has a death toll of more than 40,000 Americans

00:20every year. The proper legislative response to the automobile is not to ban it, it's not

00:25to sabotage it, it's to regulate it, it's to make it safer. And as far as I'm concerned,

00:30the proper role of Congress is not to sabotage digital asset transactions, but to make them

00:34safer to strike a careful balance between financial stability and innovation. There

00:39is a narrative that crypto and blockchain have no use cases beyond criminality, no benefit,

00:47that these technologies are nothing more than a fraud and a grift and a scam. That's the

00:51caricature of crypto that often pervades mainstream media coverage. And so I have a few questions

00:56about the use cases of crypto. I'll start with Stripe. Does blockchain, and these are

01:01yes or no questions, does blockchain have the power to enable better, cheaper, and faster

01:05payments and remittances? Yes. Would you consider that a beneficial use case? Yes. For Paxos,

01:11there are billions of people in the global south who lack access to a stable currency,

01:16whose countries are plagued by hyperinflation. Does blockchain have the power to afford those

01:21impoverished people access to a stable currency and protection from runaway inflation? Yes.

01:27Would you consider that a beneficial use case? Yes. For Stripe, does blockchain have the

01:31power to exponentially expand the market for US treasuries and lower the cost of US debt?

01:37That's certainly what it looks like today. Would you consider that a beneficial use case?

01:40Very much so. Bank of New York, does blockchain have the power to tokenize real world assets

01:44and facilitate custodial banking? Yes, it does. Would you consider that a beneficial

01:49use case? Absolutely. Now, Bank of New York is the bank of Alexander Hamilton. It's the

01:54oldest bank in the United States, the ultimate expression of the traditional financial system.

01:59I imagine you're obsessed with regulatory compliance. As the oldest bank in the world

02:04with more than $50 trillion in assets under custody and administration, would the Bank

02:09of New York waste its valuable time and resources and reputation on a technology that had no

02:13use cases beyond criminality? Does that sound remotely plausible? No, we would not. Now,

02:19tokenization is becoming the future of the global financial system. And as more and more

02:24assets become tokenized, and more and more financial transactions become blockchain based,

02:30does the lack of regulatory clarity around blockchain put the US at risk of losing its

02:36financial competitiveness? Bank of New York? Yes, it does. And if the United States had

02:41gotten intranet regulation wrong, do you think the United States would have gone on

02:45to dominate the intranet based financial system that eventually emerged? Strike? Very hard

02:52to say, of course, but quite plausibly not. So it would stand to reason if the United

02:57States gets blockchain regulation wrong, do you think the US will go on to dominate a

03:02blockchain based financial system that might ultimately emerge? No, I don't think it will.

03:07And we've already seen some evidence that if the US doesn't move here, the nexus of

03:13activity will move elsewhere. So as far as I'm concerned, in order for the United States

03:18to remain the superpower of the world, we must embrace emerging technologies, we must

03:24harness the power of emerging technologies to make America more productive at home, and

03:30more competitive abroad. And any policy that has a chilling effect on experimentation with

03:36new technology could erode American competitiveness. I had a special hatred for SAB 121, because

03:43it essentially had the effect of prohibiting an institution like Bank of New York from

03:48even experimenting with blockchain technology. And I feel we in Congress should have the

03:55intellectual humility to recognize that digital assets will develop use cases that none of

04:01us can foresee. And since there are limits to what we can know about the future, it's

04:06incumbent upon us as policymakers to foster a flexible and nimble regulatory environment

04:13that allows for the development of a new technology and allows for experimentation with an emerging

04:18technology telling an institution like Bank of New York, that you cannot even experiment

04:23with blockchain technology is the worst thing we can do for American competitiveness. What

04:29are your thoughts?

04:32I appreciate the point. And I think it's important that we continue to innovate within the safety

04:37and soundness of the financial system. We need to do both, right? We need to innovate

04:41and we need to protect the system. And absolutely, we should have the clarity of rules to enable

04:48us to do that. And we should welcome competition, right? That competition drives our economy

04:53and enables the right types of outcomes for all consumers in the marketplace.

04:58I see my time has expired. Thank you.

Ritchie Torres Pushes Back On 'Narrative' That Crypto, Blockchain Have No Uses Beyond 'Criminality'

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