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About the talk
With something new happening in crypto every single day, it feels like we're living through a race of different ambitious techies fighting to win the next big thing. On this fireside, US. Rep. Congressman Ted Budd will take us through the great race for digital payment dominance with CoinDesk's Sandali Handagama.
LA Blockchain Summit is hosted and produced by the Los Angeles-based blockchain venture studio, Draper Goren Holm.
United States Congressman representing North Carolina's 13th Congressional District. Please visit my campaign page at tedbudd.com. *** Please personalize requests to connect with context or suggestions as to how we can work together. Thanks! *** For scheduling please contact Elizabeth.Dews@mail.house.gov or call 202.225.4531.View the profile
Sandali Handagama is a global macro and policy reporter at CoinDesk. She has written about crypto regulation and adoption in the U.S., Latin America, Europe and Asia. Sandali graduated from Columbia University’s Graduate School of Journalism earlier this year, where she focused on business and finance reporting. She was the 2020 recipient of the Overseas Press Club Foundation fellowship for international business reporting.View the profile
Alright, a big hello to everyone joining us today at the LA blockchain. Some it in the next half-hour will be able to hear directly from the US lawmaker on the current state of the regulation and what it might look like in the future. So it's my pleasure to introduce to congressman Ted Budd representative for North Carolina's 13th, congressional district and member of the House Financial Services committee has been outspoken. Proponent for blockchain technology and his advocated specifically the congressman
welcome. Thank you so much for being with us today and with you An exciting time for blockchain right now. Has so much going on. I feel like, no, two days are the same anymore on top of Innovations, like, stablecoin in the freezer on Spotify, on governments, around the world has started paying attention to space, which I feel like it's it's adding legitimacy to something that people have viewed with a lot of skepticism so far. So I was wondering at what point did you look at blocked
nametag and Priscilla? And think with this is important and we need to take it seriously. Yeah, so I think this is really the inevitability of digitalization of Commerce. I mean, when you have the rise of the internet and it really 1990s and then you figured out how to transact. And then there was a question of how do you pay for it? And, you know, that the Elon Musk that we see now and, you know, we got to think about his roots and the the PayPal 8 and I would with Peter teal and really like they figured out how to do Commerce on the internet. Now, you know, I'm paying
my kids and they're, they're paying me back over venmo it, but it, it has to get more and more digital as our lives become more more digital. So, cryptocurrencies one way of doing this brings into question to the store of value and into question for us here in Washington DC is what involvement if any are regulators and if this is the future how do we be involved with out and help maintain or Grow? American? Competitiveness. The world and not hamper, a growing the sector of the economy. So that's that's really the the quandary that we
always find ourselves in. Is it is, how do we? I don't think we have to think it's going to. It's going to be our new lives is going to be the future. We want to think about guardrails in it and how do we protect our constituents? And and our citizens as this is the new future. Absolutely. I remember a couple of years back, you said that the development of blockchain technology is a matter of National Security and I feel like everything that's happened. Since then maybe you feel more strongly about that. Oh absolutely. I mean it in the past 6 months during covid having our
lives have really become a lot more digital and there's more transactions, you Seymour, Seymour from Vans, moving around, and see more eCommerce happening. Everything's now online. And so, would we look for cryptocurrency and Major transactions are now happening over the various forms of crypto. How do we keep people safe and not taking advantage of? So we definitely want to have some regulations. We definitely want to have some safeguards in there. We know that there are Bad actors out there, whether it's a state actor. If it's, if it's North Korea, if it's a
ran and those who are opposed to the United States, how do we make sure that that they are not the leaders in this? We can't be passive as a country. We want to set up, proactive guard rails and beat be out in front. Not again, not to Spirit, the industry, will take care of itself, as far as throwing this, and innovators out there around the world or spirit will spare this. But we want America be a safe place for this and to make sure that predominately good actors are in this space and that we have a way to push off and to deal with the Bad actors. You know, we don't,
we don't want China's world you to be. The dominant player here. We think the stronger America is the better. It is for everyone else is so we want the best of our country to be reflected in the policies and in the technology that the inner ways with, with that policy, Recently, actually the president of the European Central Bank, Christine Lagarde said that you're pissed or falling behind in This Global race, create a digital payments ecosystem. First, and China, has many great taken the lead in this. How do you think the US is doing? And how
important is it for us? Lawmakers, are seriously. Look at a digital dollar or a central bank, digital currency, especially when you look at such as France and Germany in Estonia, we want to make sure I'm there. They tend to be a digital leader as well, so they can make punch above their weight is one of the Baltic countries, but I want to make sure that the United States is out front on this. I think we are doing good. But the great thing about the United States is also going to be
the bad thing when it comes to Innovation that we're not at Country. China is the Chinese Communist Party can dictate Technologies. They can move massive amounts of dollars at will with the relative speed and and unity. But we got to realize what they're pushing out there that may not be the best world. You are the best technology or be in the best interest of the seven plus a billion people around the world that are moving towards sub engagement with crypto but the United States we have a relatively open society and a free Society. We want to preserve that and we want to make sure
again to push out the Bad actors and those who seek to control cuz really this is this is not about control but we want we want to make sure that we optimize the technology and make sure we keep the bad actors out of there and that it's countries that are high control. Like Shawna aren't reflected in the technology that we have to. We have to get out there then delayed I just think that we can't be passive in this. And how do you feel us lawmakers to ensure that innovators come to America and
Innovation happens here and not somewhere else? What what are you doing? And what can you do to make that happen around the world either attract or repel investment? I don't think it's about necessarily being having a grant driven where the United States of will grant Provisions for a particular technology at maybe, but I think we just need to have a very free and robust type of thinking here in a bit. I think that the US has is unmatched in that. And so one of the great things I've seen the last two years, in the future, we started out in 2016 or
2017. When I came in the office and about two-thirds of the members would scratch their heads. Is on both sides of the aisle and they would say, oh, what's crypto? And we've even had some people say it was like, it was like a nuclear threat and that's not, that's not the way you think about it. So I think it's some of this and you probably heard me make comments on this. I think some of it's generational, it's not left or right democrat or republican. Always, it's generational in realizing. This is not a threat, but it could be if we're not involved. If we don't
set up the, the proper regulatory structure, we could allow the Chinese World, YouTube dominate our future transactions. We don't really want that. I think it's best of American that is a bust. Free-thinking Innovative Society is best for Citizens around the world. Best for our country and best for cryptocurrency. Absolutely. I totally agree and stay on regulation. I mean, this is like a super fast-moving space and a new technology that still sort of evolving. And I feel like governments are constantly having to play this
to ensure oversight. And there are so many things to consider at once. It's not like our traditional Financial system where we started with paper money and then slowly transition online banking and the internet cyber crime. And yes, also Define these new financial instruments. And so in the things you have to prioritize, you've been in a focusing on taxes. I was wondering why focus on taxes over something else like security and why is that important? Yeah, we do need both. I don't think it's you focus on one or the other. I think you have the right. He had the right and logical Provisions in there,
where it's safe and secure. And people actually try. If people don't trust it as a store of value than it's done or it moved elsewhere in the more trustworthy environment and another country in it and I don't want that. But you also don't want to have like I said, a regulatory environment can be attractive or it can repel Industries so can the tax structure and we don't want people to have a disadvantage at. What do you look at a transaction? Like to be taxed as 40 cents? That that's a 40%. That's the arosia of wealth right there. I'm not saying this Filly for a wealthy person
because this is highly democratized. You just don't want anybody. If you have $100 in crypto and every time you you trade or you convert, you're losing 40% of time as it approaches 0 rather quickly. So, We can't have that. We have to make sure we have a normal regular purchase type of tax structure here. That's compatible that Emma doesn't repeal the industry. Other countries. Absolutely. And what's how far in the future? We have a framework for crypto. Yeah, taxes. You don't have been bipartisan in the past I'm talking about decades ago. But when you look at a big tax bill,
like the tax cuts and jobs Act of December of 2017. That was all one party. I'm a republican. It happened to be a Republican bill 80 to 90% of people out there to about 90% of people got a tax cut, took more home. So that's why we're grateful for that early. I think we have to realize again just needs to be a very bipartisan thing we need to realize. Let's make sure this industry stays here in the US and let's see what we can do. I mean there's a tremendous amount of animosity right now which is one of
the repressed. What are the refreshing thing sin to lie about this is it doesn't cut across party lines, cut across party lines, it's not devices, and maybe generationally. And so we do need to make sure that we work on this in a bipartisan way. From the Ways and Means Committee. And again, you know, there's some very tenured members on that committee. We want to, we want to make sure that they understand what cryptocurrency is and regardless of your party that we haven't been structor for here in the US. And staying
on that. How do you envision crypto beans that are regulated in the United States? So far there's more of a sort of state-by-state basis for New York has its own bit license and recently, Hawaii launched its own regulatory sandbox. And most recently, the CSV start trying to consolidate crypto compliance so that companies can operate in other states without having to apply for their own license. And how do you envision the future received Federal framework or the continuation of like a state-by-state, very specific
compliance framework. That's a great question that you kind of calls into question. Our country is a while. Most of things, I'm very Pro states rights, North Carolina, and then making decisions. And when I look at the insurance industry, which is Under the Umbrella of the financial services committee that we want to maintain our or 50 state regulatory body structure. I think that's the way we need to go, but with this because we look at digitalization being more Global, I think we need to come together as a country and all of our territories and all of our state's to have one
structure, like, Switzerland, I think we need to have a unified pre-emptive Federal light-touch Regulation event. Again makes it. That's another thing regulatory, it's also. How confusing is it to deal with? And if we're we're hard to deal with this country because going from North to South Carolina or to Virginia or to Montana is different and something a digital, that's really tough. And I think people would just look elsewhere for Mar unified places to do business.
So we got to be simple, and I think a pre-emptive federal regulatory structure would be very helpful here. And no, please don't ask me if I have that ready to go. I don't know. How do you feel about? If you're going for a state-by-state like you said, he wants to eat to maintain running. Me over the sector. How do you feel about license? You feel like that could be something that could be scaled to other states or yeah, that's where my expertise, glad to glad to look at that. And Steve is going to be a lot of
influences. We're going to look at some of the more advanced States and crypto and say what have they already done. I don't think we need to invent the wheel there. A lot of time. It's about, finding really good Wheels, if it's bit license. It's if it's a state that has a regulatory structure, if it's a country that has already done something at the Kong Kong or, or Estonia, we want to look around the world and and not reinvent the wheel. Well, this will be what we put together will be distinctly American and will help our American competitive. We don't read me to reinvent the wheel but we do
is need to go out there and assemble the best parts of wheels that already exist. And I would say on Innovation, I know that you're you're all four. Everything sort of. Being spearheaded in the United States and they're already so much happening is already so much happening right now. And really drove this, the same discussion of how blockchain can be applied. Not just to improve financial services and financial inclusion, but also to kind of streamline National Registries and
Supply chains. And so I was wondering what area of innovation are you watching closely? Especially in the context of how it might improve American Life? I think won this right here essentially, I didn't even ask where you're located today, so I'm in Washington DC yesterday morning, I was in North Carolina or someplace else. So I have since we look at this is not just a communication system, we're using some technologies and go use WebEx this exam dozens of platform. Some, we probably haven't even heard of that we
haven't even used yet, but this is the transportation system. You didn't have to come to Washington and I didn't have to go meet you and what a great technology and essentially this is a digital platform that were using right now in Los Angeles. This is very exciting. So I look at communication that substitutes for a transportation. That's one. I look at transactions in, really what you want to do, is this, is it removes the friction, so it deflects Transportation by substituting communication. How do we take the friction out of
transaction? I mean, for years, we have been that we've used a plastic rectangular card to take friction away because you don't always have the right cash. Cash is messy covid. People don't really want to touch other stuff there. They're hesitant, you know, there's not always enough hand sanitizer round and you don't know what to do with cash and and by the way, are the is the treasure even leave at making coins? Now, if people ask they don't have the right change. So I mean, I look at removing friction from transactions in when you have a distributed Ledger,
You're not only going to take it out of the financial part, you're going to take friction out of the the information-gathering part and people can lock down their own personal records and their histories. And although whether it's medical or whether it's legal, somebody wants to go buy a house and I mean, it is reams of paperwork, even if it's done online. And if you apply at One Bank versus another, for a car loan, or a car, or are a consumer loan, why don't you just have enough to all the same information? It's arranged differently. But if you had all that block down and just in a
distributed Ledger Ledger somewhere, you can just unlock it temporarily and then and then share it and then relock it. I just think there's tremendous ways to pick friction out of transaction and there's just a lot of transactions that are dormant they're stalled because people don't want the hassle. They've got a million things to do and they can't put up with the friction of everyday life. And so they just don't, they don't start a business. They don't buy that that home. Boo. Boo, got an apartment into a home, they don't upgrade their car, that's safer and more efficient. But if we take that
friction out, I think it'll help people's lives improve, and I think it'll grow our economy to Absolutely. And it's something that we've been noticing as well. When we reported in other countries that they're using for Joe and watching as transfer mechanisms to, you know, get money country if you're working abroad and it's it's or a streamlined this afternoon in such an incredible way and I I mean going forward from here and I have to ask, why do you feel about defy right now and the crate
traditional financial institutions that I talk about. Then you have defy course. You've had been check. Has been returned. We been talkin about the last for 5 years, I'm throw all this. So I understand what you're seeing now is traditional institutions realizing they don't want the world to get away from them, so they're investing in fintech. And now defy, this is yet one more way to take friction. System, allow the underbanked in unbanked people into the system. So I think if it
pushes access and if it moves the Bottom Rung of a ladder down a little lower so that those who have the toughest time in life can get their foot on that ladder to make their lives a little better. Then I'm all for it. I don't think some of the tools that the more sophisticated individuals and wealthier individuals have access to, that should be just for them. I don't think you can force Banks to move it down to everybody. I don't, I don't think that but I think technology naturally evolved. You think about my car. It was the wealthiest and now she's got a car,
almost everyone that needs one who had a television it first. Now, almost everyone who had a computer who had a smartphone at first but now it just moves its way and never to blame to become better, faster and cheaper and more accessible. And it's one of the things that defy does for for Banking and I think that's helpful. Volleyball. Thank you. And your optimism is great. So it's nice to hear this, but thank you so much for all your incredible insides and I feel like you look at this face with optimism and and for its potential, not
where it's at right now. I mean there are a lot of problems we need to solve and things. We need to iron out before it gets to a place where we can you know, all that mess it up. But thank you so much. And is there anything else you'd like to ask? What we need to hear is from industry. So make sure that those that aren't better hearing this webcast, and that you actually reach out to our offices and other offices, you know, reject your member of Congress. Whoever, your, your member is wherever you are in the country and share with them. Why? It's important come see us here, be
involved when travel is normalized again, or Zoom call. Whatever it takes to stay in touch with us cuz we don't want to be out of touch with what's actually happening and you're the front line of this industry. And so we want to be in charge me what Regulators to work with industry, so that we may yet. We do know these guardrails that I've been talking about but we we don't make them blah case. We don't want to make a blockade when we intended to make a guardrail to stay in touch. Keep us informed with what you need and what you don't need it. And we're here to be awful, least, most of us
are So much, once again for your time and joining us today at this has been an incredible about regulation. Have a wonderful day. Thanks so much.
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