Watch the Crypto congressional hearing highlights in 12 minutes

the topic is an important one for anyone who cares  about american competitiveness in the financial   services sector a financial ecosystem that  empowers users over bank ceos and other powerful   central decision makers and the next iteration  of the internet in which individuals are able not   only to read information and write content but  also to own a piece of the networks themselves   this doesn't seem like a new financial system per  se but really an extension or perhaps expansion of   our present one well i would disagree with that um  i think what what i believe we're seeing is a new   open infrastructure layer on the internet a  missing infrastructure layer of the internet that   is designed around value exchange and economic  coordination that is rooted in you know immutable   data the ability to interact with counterparties  in a very very safe way that hasn't existed   before on the internet and really many of the  efficiencies that the internet brings in terms of   moving information brought into moving value  but also with greater degrees of security than   are often offered through the existing financial  system so i really do believe we're building a new   global economic infrastructure layer in your view  is additional guidance defining clear rules of the   road for investors and market participants needed  at this time thank you for the question we believe   this is a very important area of focus for the sec  and this committee we do agree that the laws are   clear however existing laws regulation and legal  precedent make it clear that blockchain tokens   are not securities so we believe that the law  clearly shows that blockchain-based digital   assets are one of two things either a new form of  digital property or a new way to record ownership   as brian brooks spoke earlier about we do  believe that clarity is needed because these   are new assets it's a new way of transacting  with these new protocols that we spoke about   and i think it would benefit all of us in  the ecosystem to have agreed upon definitions   i think from the standpoint of what's available  in the market today one of the things that we   need to do better in this industry and  i think we're working in that direction   is much like the early days of the web we need  to focus on uh consumer-oriented uh products   that are that have a lot of information about the  the challenges and also brings the person through   from a literacy standpoint so they understand you  look at user experience you look at ux design all   of these things are really really important and as  we saw in the early days of the web it happened it   came together we became better at educating the  the audience about what's available and what's   out there the nice thing about blockchain is you  have immutability you have records that are out   there that can't be changed this information is  already leveraged by chain analysis for example   an elliptic to demonstrate the different things  that are happening on chain and i think it off   it allows us the opportunity to create a lot  more foundational efforts with respect to user   experience and focus on these consumer protection  issues that you're talking about one of the really   innovative properties of cryptocurrency markets  are 24 7 risk monitoring and engines we do not   have overnight risk or weekend risk or holiday  risk in the same way traditional assets do   which allow risk monitoring and de-risking of  positions in real time to help mitigate volatility   um we've been operating for a number of years  with billions of dollars of open interest   we've never had customer losses um clawbacks or  anything like that even going through periods of   large movements in both directions we store  collateral from our users in a way which is not   always done in the traditional financial ecosystem  to backstop positions and the last thing that i'll   say is if you look at what precipitated some  of the 2008 financial crisis you saw a number   of bilateral bespoke non-reported uh transactions  happening between financial counterparties which   then got repackaged and re-leveraged again and  again and again such that no one knew how much   risk was in that system until it all fell apart if  you compare that to what happens on ftx or other   major cryptocurrency venues today there's complete  transparency about the full open interest there's   complete transparency about the positions that  are held there is a robust robust consistent risk   framework applied and we're excited to work with  the cftc on our u.s license and regulated venue to   bring a lot of this to u.s customers as well as  digital assets become more common in the global   marketplace with the total digital asset market  reaching almost three trillion dollars as ranking   member mchenry just said how do we ensure the u.s  dollar remains a reserve currency well mr lukemire   it's terrific to see you again and um i'd give you  a couple of thoughts on that important question   one is if we start with stable coins before we  talk about other crypto assets i've said for a   long time that the secular reduction in dollar  holdings as a percentage of global central bank   holdings is alarming and this has been going on  for more than 10 years at this point so dollars   is a share of the european central bank the  japanese central bank etc has has shrunk from   80 plus percent to more like 60 plus percent in a  short amount of time what that tells me is that in   the future with the rise of china and other major  economies the us dollar can't take its primacy   for granted and we need to start thinking about  competing on utility on features not just based on   a post-world war ii monetary system that we could  take for granted for the last two generations   and that's one of the reasons that i've been  such a supporter of internet-enabled dollars   which allow us to compete on features not only on  history i think that's really critically important   the second thing i would tell you is as we enter  year 11 or 12 of a highly inflationary environment   after all we've been printing enormous numbers of  new dollars since the financial crisis there will   come a time gradually then suddenly when the  attractiveness of the dollar relative to other   currencies could change one of the benefits of  the crypto economy is that it creates some counter   incentives on the part of the fed to do that kind  of policy because people will flee to other kinds   of assets and that sort of market competition  is something that i think will ultimately   shore up our monetary policy and keep the dollar  where it rightfully ought to be which is as the   dominant reserve currency it's been for all of our  lives can you talk about the difference between   a stable coin versus a central bank digital  currency and what advantages do does a stable coin   offer that that a digital dollar say at the fed  would not be able to offer thank you congressman   barr i'm happy to i think the first difference is  that uh stable coins are operational and growing   in the market today and they're built on uh an  open internet technology model so when we think   about all of the things that we've seen built  on the open internet on these open protocols and   networks whether it's ubiquitous information  exchange communications interaction around   the world that same open internet model is the  foundation for stable coins and so i think that's   a fundamental difference a cbdc which is a con  concept right now it's not operational would very   likely be a very closed loop technology that's  tightly administered and run by the government   and would unlikely be accessible in the same way  that these open networks are accessible and so i   think that's a critical difference but i i would  come back to the most important which is that   most payment system innovations in the world have  been driven by the private sector and i think   what's taking place today with digital currency  is is no different can you talk about some of   the negative consequences that could happen if  we take a heavy-handed approach to regulating   this developing technology well i come back to mr  vargas's question a second ago which i think is   the right way to answer your question you know  mr vargas asked the question of um people have   the potential to lose a lot of money these things  are volatile they're risky how do we protect them   from those kinds of issues there are two ways of  answering that one is to prevent as many people   as possible from accessing this amazing technology  for example the way the current legal regime works   is certain kinds of assets can only be purchased  by accredited investors meaning rich people   so the only people who can get rich on this are  people who are already rich that'd be one way   of protecting people from losing money is to make  sure that only the richest can access it another   way of addressing it would be to make it safer  the way that we made equities safer 40 years ago   right we created mutual funds diversification  sector funds and other things that make it easier   for regular americans from places like my hometown  and colorado to buy equities without having to be   stock experts strangely in the u.s we've refused  to do that so far so we don't allow crypto mutual   funds we don't allow people to diversify the  way that they do in canada germany singapore   the united arab emirates and a series of other  regulated economies around the world so i would   argue the way to win is to bring more people  into the system more safely not to keep them out   at their own peril so i represent the south  bronx which is often said to be the poorest   congressional district in america and of greatest  concern to me are the use cases of crypto that   would improve the lives of the people of the south  bronx i represent a heavy population of immigrants   who often pay predatory fees in order to send  remittances to their loved ones abroad so what   can crypto blockchain web 3 do for that dominican  immigrant in the south bronx who is burdened by   remittance fees that she cannot afford how much  more affordably and quickly can the crypto economy   facilitate remittances mr cascarelli if you  could take that question and please be specific yes uh thank you for the question um i think this  is a really important element of the technology   which again is that it's open to anybody  you don't need to have a bank account   you don't need to in fact rely on any intermediary  so somebody who's an immigrant and wants to send   remittance to family member another country is  able to do that and um there's ways to deal with   both crypto and to do it with a stable coin  and all you need to do is download a wallet   and then you can send it to somebody else anywhere  in the world and so this is a really powerful   tool for democratization of access especially for  those who have difficulty getting bank accounts   there's no minimum fees there's no minimum  balances there's no check cashing fees that are   part of this technology and you can do it in some  cases for you know a penny or less one bitcoin   transaction a single purchase sale or transfer  uses the same amount of electricity as the typical   u.s household uses in more than a month and so  this is really outstanding to me and many folks   do not uh know this many americans and folks that  are talking about this issue and so miss dickson   can you explain why for a cryptocurrency like  bitcoin that rely on proof of work model mining   is such an energy intensive process thank you  for the question this is a really important   area obviously in terms of sustainability  and the focus on what we do in this space   we should always be trying to do it better and  much more efficiently uh the in bitcoin is the   proof of the the way that bitcoin consensus is  achieved is through uh really complicated math   equations and so there's a lot of energy that's  needed to be used to be able to make that happen   i know best about the the consensus mechanism on  stellar which is the stellar consensus protocol   which can be done on a very small computer  any of the ones that you have in front of you   and the uh it consider we had a university of  london did a study on the stellar network itself   and the uh network is is low in terms of energy  consumption it's around point zero zero zero   two two kilowatts per hour for each transaction  that's less than a transaction for visa so that's   a really important comparison for us all to think  about so not every consensus mechanism is proof   of work or proof of stake again there are many  many different ones out there and depending on   the mechanism it depends on the energy consumption  but it's definitely important for us to be able to   try to do this better more efficiently and to  consider the sustainability concerns around it

Channel: CNET Highlights

Views: 388,527

Keywords: event, livestream, 2020, live

Id: ux6CmsrOFeo

Length: 12min 19sec (739 seconds)

Published: Thu Dec 09 2021

Reddit Comments

[u/Bitmiliionare24]

That XLM gal really explained well why “BITCOIN TRANSACTIONS IS WORTH 2 SUNS PER DAY” claim is stupid… by shilling stellar.

Heck i ain’t even mad, that was impressive

[u/FlyingDutchmantoMoon]

Ok Mr. Brooks looks like Bob Saget, and I half expected him to stand up and say:

You call crypto an addiction? I used to suck dick for coke!

[u/cbelaski]

I was looking for something like this, thanks!

[u/FutureBoatinAccident]

Good to see some sense finally being talked in that building

[u/Xennenial]

Congress are just butthurt they aren't making any money off of this. All the exchanges have to do is give campaign contributions to every member of that committee for 2022 midterms and the attempts at regulation will magically stop overnight.

[u/Krypto_Kane]

The Stellar plug was a master manuever

[u/lagav16]

Considering I’m not from the US, I had no intention to watch this. But the condensed version tempted my lazy ass.

[u/willfords007]

That fact complete transparency

[u/crailface]

Smells like adoption