Despite the headlines, what’s happening in the world with blockchain, with cryptocurrency and stablecoins is not just lending, trading and borrowing. Other use cases are active and focused on solving real world challenges using the technology. Cryptocurrencies do provide a potential way to address a number of these issues, making it easier, cheaper, faster, and more equitable for people to do what they need to do to manage their financial lives. A little bit about FTX, we are a cryptocurrency exchange. We have a different structure than the traditional exchanges do, as do many digital asset venues.

• A stable coin aspires to be incredibly stable and is tied to the dollar.
• We do protect our customers for any hack of the Coinbase hot wallet, and we have third party insurance, plus we use our own balance sheet to protect our customers for the event of loss on our platform.
• So I think we have to proceed very cautiously.
• Especially after highlighting the extensive measures crypto exchanges take to protect their spot markets.

They have full access to the same sets of tools that institutions do, and they have full access to all of our market day, which we make publicly available for free. This is true whether you’re accessing it via API as a sophisticated institution, via our website, or via our mobile app. You could then send them to family in a different country, for example. And once this is global, which will be next year, you could then go into participating MoneyGram locations and have those assets converted into your local currency, which is very important. So it works very well with the cash economy and cash ecosystems, and it demonstrates the true interoperability with blockchain and traditional financial infrastructure, because that’s what MoneyGram is and has done exceptionally well. Whether that be to be able to get it from family outside of their country or just to be able to convert these into digital assets.

So it depends on the product that you’re speaking about, Congressman. And some we share and some are very much ringfenced. Specifically, on the issue of custody and self-custody, this is a way that crypto tries to make an advance over the current system. So the issue with custodial assets, we’ve seen in this committee’s looked at many, many times. But when the White Sox won the world series in 1906, the entire team had a total of six home runs all year. Now with that being said, many of you are becoming the Babe Ruth in the financial services space.

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And we think it’s important that there’s a nimble group that is constantly looking at the changes in crypto. And so that’s why we recommended having an SRO in addition to a single federal regulator. And what we argued, and I think is hopefully going to bear fruit significantly over the next year, is that what we really need are ways to provide proof of digital identities. A firm like Circle or a firm like FTX or Coinbase or Paxos or other folks testifying here could provide a cryptographic proof that someone has been KYC-ed, and that proof could actually be carried around with them in a hardware wallet or a software wallet.

For stablecoins, independent auditors should regularly attest that assets back in the token are always held in reserve. Those reserves should be held in bankruptcy remote accounts, and available to the issuer and not available to the issuer general creditors. 2021 was the year of the cryptocurrency. More Americans than ever are taking notice of this transformational technology. DeFi, DOWs, NFTs, Web 3, jargon that was really once just used on crypto Twitter, they’re quickly becoming part of the lexicon.

So it’s security, legal and compliance before we list an asset. It is not a black and white test, but based on our assessment, we believe it’s lower risk that these are securities before we list them on our platform. We separately do a compliance review. Our compliance review includes looking at the developers of the token, ensuring they’re not on an OFAC sanctions list. We look at to make sure it’s not a scam, that there’s actual people using this coin, that it was developed in sound manners. And so, this is a really powerful tool for democratization of access, especially for those who have difficulty getting bank accounts.

What I would tell you is in the beginning of a fundamental technological revolution like this, the early days are going to see turbulence, but the long chart of crypto in only its 11 year history is up and to the right just like the US equity market. So what I would say is there are risks. There’s disclosures that ought to be had. There’s framework regulations that should be adopted.

When you look at the number of people who are underbanked or unbanked, both in the United States and globally, it’s indicative of a system that does not work for everyone. And this is a product of the intermediation involved, it’s a product of how the larger institutions have evolved, and it’s a product of payments infrastructure that is difficult and clunky enough to use that it just does not work for most people. Regarding financial systems, the conversation around stablecoins and digital currencies will continue to intensify. We’re finally starting to see buy-in from traditional financial institutions that blockchain is a cost-effective, swift and powerful solution. If these institutions begin issuing stablecoins on their own, as Bitbond and Bank von der Heydt did, the mainstream consumer will become much more comfortable with the idea of digital currencies and blockchain in general. I think in some ways, it’s a question of semantics.

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You will have five minutes to summarize your testimony. You should be able to see a timer that will indicate how much time you have left. I would ask you to be mindful of the timer and quickly wrap up your testimony when your time has expired. Mr. Allaire, you are now recognized for five minutes to present your oral testimony.

Easiest way to supervise that would be let them in the banking system and have the OCC have authority over them. 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.

And then you see more proposals, like the one that we’ve heard recently, with the craziest proposal is, the banks have to report every transaction by Americans and their banks to the federal government. … again, for helping us understand the extensive guardrails a cryptocurrency exchange like FTX has in place to ensure sound crypto spot markets for investors. The SEC has approved several Bitcoin futures ETFs that get 100% of their pricing from US crypto spot markets. So I guess I’m left incredibly confused by how the SEC’s concern over spot market vulnerability applies to Bitcoin spot ETFs, when it doesn’t apply to Bitcoin futures ETFs. Thank you, Chairwoman Waters, and thanks to our witnesses for joining us today.

Denelle Dixon: advocate for the Stellar Foundation

So for us, https://currency-trading.org/s are important customer set. I think that they’re trying to upgrade their infrastructure to be able to adapt to this new technology. There’s a recognition that the way the current financial system is working today, it’s not really adapting to the 21st century needs of a digital economy. I actually don’t think that it’s contradictory at all.

We similarly run OFAC tests on all of our customers, both on onboarding and then ongoing. We believe that sanctions are an effective tool of the US government and combating illegal activity. In addition to our onboarding controls, we do transaction monitor. We do surveillance on all of our transactions on our platform, but also have tools that are looking across the industry looking, and we partner with law enforcement on investigations.

Treating crypto as a single unitary activity whose main feature is a need for financial regulation would be like treating the original internet in the 1990s as primarily a tax policy issue. Additionally, the initiative signals a rising interest from traditional payment networks in ​​connecting fiat and digital currencies. I completely agree that this is the most important thing that the U.S. can do at the moment.

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Use cases like these are in varying states of maturity, but their current and potential value is undeniable. For that matter, why is there no clear path for https://cryptonews.wiki/ focused insured depositories chartered in the state of Wyoming to access federal reserve payment services like other insured depositories? These are the big questions that I hope to address today. Thank you, Madam Chairman, ranking member McHenry.

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I’ll just briefly say https://crypto-trading.info/ important to have robust risk engines that monitor the positions on these assets. We’ve gone through multiple, very large up and down moves and been able to manage positions both times. I’ll make one quick comment, which is one of the benefits of this technology is these stablecoins, all of the code that they provide and how they interact is all public and open source.

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And then part of that is that there are the ability for an individual to self-custody assets with a piece of hardware or piece of software. That piece of software could be downloaded from an app store. And they’re self-custodying a stablecoin like USDC or a Bitcoin. And the software maker itself is not involved in facilitating a customer transaction. They’re really just a software developer providing technology that end users can use. And I think the rule as it was outlined would kind of be a square peg-round hole or a bit of a blunt force instrument.

Thank you madam chair, and thank you also for convening today’s hearing. I know we’ve been here for some time, but it’s been very informative and, and I appreciate it, and I know we all do. Ms. Haas, if I could with you, could we talk about the Crypto Rating Council, that I believe Coinbase and other industry players created to determine what digital assets look more like securities and which ones don’t?