On Tuesday, the US Senate Banking Committee held a hearing on the issue of cryptocurrency regulation, which was attended by lawmakers and industry experts.
“Blockchain is a good technology, but it cannot meet the needs of people who do not have access to banking services.” It was this thought that became the leitmotif of the hearing on the regulation of cryptocurrency, held in the US Senate.
At the meeting, lawmakers and industry representatives carefully studied the claims that technology would stimulate greater access to financial services. During the hearing, Senator Brian Schatz asked Jeremy Allaire, CEO of Circle Internet Financial:
“Do you really think that in a society in which only 81% of the population currently owns smartphones, we are close to democratizing the use of blockchain-based products?” I do not doubt the potential of this technology, I just do not think that it will be able to serve low-income communities, and I do not think that you have convinced anyone here that such actions are planned. ”
According to Schatz, it is likely that the blockchain will become a widely used tool, but this does not mean that it will solve the problem of access to banking services. Ellir agreed that the problem of access to banking services must be considered comprehensively.
“These are human problems, problems of real politics, as well as the risks we face in the financial system. They certainly exist. Blockchain really gives us the opportunity to get closer to their solution, but we do not have a magic wand that will give answers to all the questions, ”he said.
The problem is not technology
University of California law professor Mehrsa Baradaran, who also participates in the hearing, noted that about a quarter of the entire US population does not have access to the financial system and is spending “billions” on paying alternative providers for quick access to cash. However, in her opinion, this is not a technological problem, but rather a question of public policy.
Baradaran believes that for individuals who do not have access to financial services, you need to create an access point. Although the blockchain is one of the technologies that can help, “there are many simpler ways” of opening such access.
“The problem of customers with low incomes and insufficient access to financial services is not that they are dissatisfied with the existing technology, but that they are isolated from the banking industry. They are not able to use credit cards, because banks are not interested in servicing these customers, ”she said.
Schatz added that he does not consider blockchain to be a useless technology, but, in his opinion, the introduction of blockchain requires a number of intermediate steps that have not yet been studied. He noted:
“It is important to understand what this technology is capable of, and what not. Because if we are going to create a regulatory framework, we must clearly understand the problems that may arise, as well as the potential that the blockchain has. ”
After the hearing, Brian Brooks, Coinbase Legal Director noted on Twitter, that “even those who are skeptical about the possibilities of cryptocurrency often recognize the shortcomings of the current financial system and the consequences of excluding large segments of the population from the traditional banking services sector”. However he considersthat the blockchain, being “the latest breakthrough in the field of P2P technologies,” is likely to be necessary to improve the existing financial system.
Initially, plans to hold a hearing in the US Senate became known last week. It was then supposed that lawmakers and industry experts would discuss specific regulatory controls, but this did not happen. US lawmakers have devoted considerable time to discussing the issues of cryptocurrency industry that have emerged over the past month. Note that the US Congress has already held a number of hearings on the cryptocurrency industry, the last of which took place last week and was devoted to the Libra project.