Crypto thoughts from the Chair of the House Digital Assets Subcommittee
Ric Edelman: It's Friday, June 23rd. Coming up on the show today, Congressman French Hill, chair of the House Subcommittee on Digital Assets.
For the past two weeks, we've been talking about the biggest technology of all video games. If you've missed any of these fascinating episodes, the links to them all are in the show notes today. I encourage you to check them out. Today is our last installment on the subject. And obviously, if you're going to be in the metaverse playing video games and yeah, you will be, it's going to be a big part of your future. It means we need to make sure that you're protecting yourself.
And so today, as we end our two week series on video gaming, I want to talk about personal cyber insurance. If you don't have it, you need to get it. A cyber issue could easily cost you thousands of dollars in losses over the past five years. The FBI says they've gotten 3 million complaints just about personal cyber-attacks. People have lost a total of $28 billion and it's getting worse. Last year, there were 800,000 complaints in one year alone, $10 billion in losses.
And by the way, you think you've got identity theft protection in your credit card, forget it. That's not enough. You need a personal cyber policy that includes protection against cyber bullying or your personal information being used in a malicious or damaging way with people playing games in the metaverse, with you doing stuff online with your avatar engaged online in ways never before. You need to protect yourself.
Now, the good news is all the big insurance companies offer cyber insurance. AIG, Berkley One, Chubb, Cincinnati, Pure, State Farm, you name it. Most offer it as an add on to your homeowner's policy or your renters policy. Some companies will let you buy this special cyber insurance protection as a standalone policy as well. The policies usually cover reputational damage from a cyber-attack, money lost to social engineering fraud, ransomware attack remediation, data restoration, identity theft, cyber bullying. Some of the policies even give you 24/7 access to experts if you're a victim. Some will also give you tech support, legal advice. You even get psychological counseling because of the emotional harm that can be inflicted if you become a victim.
These policies are not expensive, $300 or less, and you get anywhere from $10,000 to $100,000 in benefits. Of course, like with all insurance, the more you pay for the policy, the more you get in benefits. So talk to your homeowner's insurance agent to see if cyber coverage is part of your current policy. If it's not, it's pretty easy to get what you need. But it's definitely as we move more and more into the world of virtual living, such as through video gaming, that we protect ourselves in our online lives, just as we do in our physical ones. Hope you've enjoyed our two-week series on video games.
Ric Edelman: A couple of weeks ago, I hosted the fifth Annual VISION Conference in Austin presented by my company, the Digital Assets Council of Financial Professionals. DACFP VISION is the longest running Digital Assets Investment conference that's specifically for financial advisors and accredited investors. And at this year's conference, it was our biggest ever attended by more than 125 financial advisors and investment professionals from all over the country, one of our keynote speakers was US Representative French Hill. He chairs the House Subcommittee on Digital Assets. I wanted to share that entire conversation with you today. Here it is, unabridged and uncensored.
Ric Edelman: The audience at this conference, Congressman, is comprised entirely of financial advisors who want to learn the latest about blockchain and digital assets. You're the Vice Chair of the House Financial Services Committee, and you chair the Subcommittee on Digital Assets, Financial Technology and Inclusion. On June 2nd, as you know, the Chair of the Financial Services Committee, Patrick McHenry, and the Chair of the House Agriculture Committee, Glenn Thompson, jointly introduced long-awaited legislation on crypto. Among other features in the bill, it answers the big question: Are crypto assets commodities or securities? Tell us what the bill says.
Rep. French Hill: Well, Ric, it's great to be with you. Having spent four decades in the financial services business, including running three different brokerage operations, it's good to be with you and be with your audience of financial advisors. And this has definitely been an emerging issue. I was very intrigued by the background. I read that the vast majority of your financial advisors personally invest in crypto, but only a very, very small number recommend it for their clients. And I think if I was in the same boat, I wouldn't be in either camp, I wouldn't be recommending it and I wouldn't have invested in it either to this point. And part of that's because I don't think you have the kind of transparency to make a good business decision. And I'll cite as People's Exhibit A, when you have Sequoia and some of the top rated venture firms in the world jump into that. And the first question I ask is, “Well, who did the due diligence on that dumb idea?” So that's why I think this regulatory framework is critical and I wish we'd done it before. We had a fintech task force that I chaired almost four years ago now, and that was the beginning of the education of our members, Democrat and Republican, about all things digital and how fintech was going to revolutionize both the finance on the customer acquisition side and the back house compliance side.
Ric Edelman: That's one of the big challenges, isn't it, that there has been a lack of regulatory clarity. We have a lot of players you cited as, you know, the poster child of the bad boy of this business operating in an unregulated environment offshore, predominantly where investors are not getting advice from their financial advisors because the advisory community is not engaging for the very reason that you cited. There isn't regulatory clarity there. Firms are concerned that they don't know what the rules are. They're telling their advisors to simply stay away. But the problem is investors are not staying away themselves. Over 22% of US adults own crypto, but they're not doing it with the benefit of their financial advisors, which means they're likely engaging in crypto in an extraordinarily dangerous way. It's already a dangerous asset. We know how volatile and risky and uncertain it is, but we're piling on by forcing advisors or forcing investors to engage without the aid of their advisor. So that's why we're very encouraged by this bill, which we are hopeful will provide those rules of the road. Do you feel the same way that this bill, if it does pass, will give the financial services industry the confidence to finally engage in this asset class?
Rep. French Hill: Yeah, I do think it takes away the very haphazard, schizophrenic way that the Securities and Exchange Commission and the CFTC, the Commodity Futures Trading Commission, have dealt with this under both the Trump Administration and the Biden Administration. It's particularly bad now under Chairman Gensler, but it wasn't terrific under Chairman Clayton as it relates to making strong progress and bringing a great deal of clarity. Although I'll give the Trump Administration credit, both in the banking regulatory sector and in the securities sector, offering some clarity on things like custody and state trust charters and some foundational elements. But this bill goes way beyond that.
This defines what's a security, what's not a security. This defines how you do liquidity for those entities that are still trading as securities but not yet decentralized. It goes into great detail on how one becomes decentralized and how is that certified. It talks about how dealers, brokers, exchanges are all registered for digital assets. It defines how that will work. It defines what is in the SEC's protocols and purview and that for the CFTC. So I think it's a very comprehensive market structure bill. It deals with custody, no co-mingling. It deals with basically all the principal evidence of fraud and mismanagement that we've seen in the FTX collapse. And I think it brings clarity to the current trading platforms where one doesn't really know what the situation is. And you've now got the SEC uncertainty about declaring essentially all tokens as securities. And so therefore, I think it also clears up what you might consider listing standards for a trading platform where something needs to be located. So this bill brings clarity. And then we wrote another piece of legislation that's also pending, that defines the rules of the road and the quality issues in and around payment stablecoins, which are also a critical part of the ecosystem.
Ric Edelman: And we'll talk about that in a moment. I note that since the bill was introduced, support for it in the crypto community has been very strong. What's been the reaction among your colleagues in the House?
Rep. French Hill: Well, I'd say it’s mixed. This is a heavy lift. We've done a lot in the education format, but we don't have the same level of detailed knowledge among members about market structure and the differences between SEC and CFTC rulemaking than we would have on payment stablecoins where we've had many, many more months of, I'd say, member comfort. So members are learning about this as we've done roundtables in the last 5 or 6 weeks. We've met with individual members and member staffs about this draft. We've asked for their comments by the middle part of next week, towards the end of next week. So you're right, it's been an either lean forward, positive or muted response from the industry, and members are just asking all their most basic questions. But you'll see that will continue to advance over the next 2 or 3, four weeks as we do more work in the in the committee on it. This is not a partisan issue. This is a bipartisan issue. We have strong Democratic and Republican interest in this issue, both on the House side and the Senate side, as you know.
Ric Edelman: So are you hopeful that in the Senate, where the Democrats have the majority, that it will pass there as well?
Rep. French Hill: Well, Senators Loomis and Gillibrand are considering reintroducing their market structure and payment stablecoin legislation that they had an early version of last summer. We've met with them, obviously, and they are glad to see the intensive work we're doing in the House on drafting and the concepts that we're spelling out that may assist them and what they're doing. But we look forward to hearing their best ideas in the Senate on the approach that they might take. Both New York and Wyoming, of course, have very strong leadership positions at the state level, so I think you'll see them put an emphasis on that state pathway that we outlined in the payment stablecoin bill.
Ric Edelman: And in fact, let's shift over to stablecoins now. Many argue that this is the low hanging fruit, easier for Congress to pass legislation on stablecoins than on crypto in general because it's the most controversial element of crypto, which is price volatility and related to stablecoins are CBDCs, central bank digital currency. And what I've observed is that there are lots of members of Congress who like crypto, but they don't like the idea of the Fed launching a CBDC. Talk about your position on this.
Rep. French Hill: Well, I've introduced a bill in the last couple of weeks with Rep. Jake Auchincloss, who is a Democratic member from the Boston area and used to be on the Financial Services Committee. We both introduced this bill together to send a bipartisan message that we oppose a central bank digital currency that's not authorized and designed by Congress. This is not anything that we think the Fed or the Treasury can do on their own. And I would say generally on a bipartisan basis, a vast majority of Republicans and Democrats are opposed to any sort of a retail CBDC. Now, this gets confusing to a lot of constituents. I talk about this issue all the time. I mean, we even have members of Congress who have alleged on Twitter that what the Fed now has, which is same day settlement, real time payment technology, and what the private sector has and the Fed is going to roll out, is that of a CBDC. So there's a lot of misinformation out there about payment infrastructure. But I think it's safe to say a majority of members don't support a retail CBDC. This is the type of effort where you would bank at the Fed. You'd have debits and credits at an account at the Fed in your name. You would tokenize all those payments using a government issued CBDC.
Rep. French Hill: I just don't know anybody advocating for that. And the only country that's really tried it in an at-scale sort of way is China. I'm not sure it's working so well, frankly. And in our in our country. I just think that's not going to happen. So what's the alternative to that? It's letting the private sector innovate. Let the private sector think through a tokenized payment on a blockchain facilitated by a payment stablecoin And that's why we've emphasized this bill to create what's the definition of a quality one? How can bank and non-bank issuers participate in that market to create competition in this new emerging payment mechanism? So I think that I hope that's helpful to people on this topic. A lot of research still being done on CBDCs, a lot of hype from 2018 out there, but it's not ready for prime time in a big developed, rich country like the US with excellent payment infrastructure. In my view, when the whole idea of distributed ledger payments is also a fledgling, you know, startup type business. Now, I don't think that's going to be aided by having the government get involved in it. But if you have some financial advisors who love banking at the post office, then maybe this is the next best idea for them.
Ric Edelman: So let's drill down a little bit on this. You've articulated very well your opposition to a CBDC, a retail interaction between consumers and the Fed. And you've articulated very well that the majority of members of Congress agree with you. And that means this is dead in the water. What you haven't said, which I'd like you to elaborate on, is why you feel this way, because this strikes me as a philosophical conversation, not a technological one. If you like stablecoins, then CBDCs are basically a stablecoin simply one that's issued by the Fed rather than the private sector. So articulate for us why you object to the notion of a Fed version of a stablecoin relative to a private market sector stablecoin.
Rep. French Hill: Well, both do bring up questions of fiat money in a tokenized environment and how that impacts bank reserves and the conduct of monetary policy. So there are similarities that have public policy concern there. I'm always biased towards private sector innovation in fledgling startup environments and not have the government put its thumbprint on it, saying we're going to issue this and this is all there is. So that's number one. Number two is it's not clear to me that it's needed yet. Even if you project forward many, many years and a ubiquitous Web3 type payment and a ubiquitous use of distributed ledgers and tokenized, remember this is the key point tokenized payments on a ledger. That’s because the vast majority of Americans may buy, sell, settle and organize their lives quite happily through faster same day settlement, real time payments, using their existing financial infrastructure, which is also speeding up and improving. And they just won't be engaging that frequently here in the short run on a distributed ledger type token. Now, at the wholesale level between banks, between central banks, inside companies, particularly global multinational companies, I certainly envision people using distributed ledger technology to clear trades, clear activity, reduce agency costs, and I think they will settle in some sort of a tokenized payment, whether it's inside JPMorgan Chase's Onyx program for their international customers or a white label version of that for other businesses. And you certainly see it in Global. I think you see it more and more in global fixed income trade settlements. So number one, no, because we don't need to start out with the government putting its thumb on the scale and saying all transactions in a tokenized dollar payment have to use the US CBDC. That's kind of my view. And then that allows some experimentation and years from now maybe we'll think that's something we want to do. But then I would argue it has to be authorized by Congress under Article One as it relates to coining money because this would be in effect coining money.
Ric Edelman: Several folks point to what happened in Canada last year when the truckers blockaded the bridge and the Canadian government froze their bank accounts in an effort to get them to break up their blockade. And many people argued that a Federal Reserve CBDC would be that on steroids, that it would create too much opportunity for government control if your money is directly tied to the Fed via a CBDC. Do you share that view that this is yet another reason for not favoring the notion of a Federal Reserve CBDC?
Rep. French Hill: I do. I've spoken this morning in answering your questions sort of in economic terms, but if you look at it in a personal choice term, you've got a real risk to privacy and a real risk of government control and surveillance there, because you're centralizing all data flowing back through a government entity. We already have this problem. It's why I opposed the collection of all stock trades. It's why at the SEC, it's why I oppose collecting every credit card transaction at the CFPB. If these government databases have no privacy protections that are sufficient, they aren't cyber protected like they should be. The loss of personal information is a high risk. So why would we do that on steroids? Or why would we even give the appearance of trying to surveil people's payments or purchases or behavior? So I think it's not consistent with the Fourth Amendment. I think if people make that argument, they're not wrong. I think they're taking it to an extreme, on steroids. That is a low probability event in our country the way we're structured. But I just argue that because of our financial infrastructure, our large economic size, our diverse financial services system, we're better off letting the private sector innovate here. But I don't see any evidence that a CBDC in China is successful except in surveilling people. I don't see it being successful in the Bahamas. It's got a lot of publicity around it as it relates to making anybody's life easier. The only people I see advocating this are a few far left progressive people who I think believe that it will create a new age of Aquarius, where we're all at peace and harmony and have equal wealth and whatever. I think it's nuts. But I do think it's fair on economic grounds, private sector innovation grounds and on this personal privacy grounds that it's just not ready for the idea is not ready for prime time and it doesn't have broad support.
Ric Edelman: Let me shift over to the SEC now. About a month ago, there was a hearing where SEC Chair Gary Gensler testified. Everyone here at this conference has seen the Chairman's dialog with Gary Gensler, where Congressman McHenry tried to get Mr. Gensler to answer a simple and direct question of whether Ethereum is a commodity or a security. And of course, as you know, the chair of the SEC evaded the question. Were you surprised that he refused to answer that question?
Rep. French Hill: I'm never surprised when Chairman Gensler refuses to answer a question, but I got a big kick that at the end of the hearing, at the last question by Congressman Donalds that he was forced to answer. Yes, he did write the check for the Steele dossier as the chief financial officer of the Clinton campaign. So anyway, there was at least one admission during the day. Look, Chairman Gensler knows a lot about this industry because he tells us he does. And he taught a course in apparently distributed ledger blockchain innovation at MIT. But I don't believe he's handled any of this very effectively. He has been an impediment in the stablecoin work between the White House, the Fed, the House and Senate, and here it's because he won't answer questions like that. He's been a bit of an impediment for having a reasonable conversation about this market structure bill that we've worked on and written over the past 3 or 4 months. And think about this, Ric. I mean, he could have through using his exemptive relief authority, built out many of the points that we have in this bill by using the commission to do some rule making proposals and grant some exemptive relief. And he's just chosen, just plain and simple, not to do that. We have tried to make it as simple, as straightforward as possible, and we're going to continue to refine our draft. We invite everybody who's watching to send us comments on the draft. It's posted out there for people to read. And the SEC part is about a third of the draft and the other two thirds are setting up that regime in the CFTC because they don't have the same approach to oversight that the SEC does. So we've had to build that out. It's quite more extensive in the commodity arena.
Ric Edelman: You sound frustrated about SEC Chair Gary Gensler. Patrick McHenry has shared his views of frustration as well. It got to the point that a member of your committee, Congressman Warren Davidson, who represents the eighth District of Ohio, introduced a bill to fire Gary Gensler, citing what he called Gensler's abuse of power and failure to protect investors. What's your viewpoint of Congressman Davidson's bill?
Rep. French Hill: Well, first, Warren is one of my close colleagues and he is the Vice Chairman of our Digital Assets Committee. He has been a real leader in thinking about the response to distributed ledger technology blockchain not only for its use in government, but also how to facilitate it in our economy. So Warren is a very good thinker in this arena. That frustration, he voiced it in this messaging bill about Chair Gensler. I don't see that bill moving. I'd rather see Gary Gensler submit all the answers to the questions that we've asked on FTX directly, where I think at the heart of where Warren's going and if he doesn't, I support the committee's subpoena. In all those conversations, records, interactions between the SEC staff or any commissioner and FTX’s officials or anybody representing FTX. And if he doesn't answer the subpoena, then I would certainly be willing to work with whatever the legal ramifications are for holding him in contempt. These are the kinds of things I think we have authority. But if we don't run the executive branch, we don't have the ability to fire executive branch officials and under some circumstances, we could impeach somebody. But the steps I've outlined are what we should undertake.
I think that we will hold Gary Gensler's feet to the fire on this. Think about this. Last year, during the calendar year, he was saying, come in and register. He was saying, Let me work with you. Let us help you do this. He was condemning Kim Kardashian for promoting crypto, but do you recall anything before the collapse of FTX where Gary Gensler had publicly talked about that? The answer is no. That's been frustrating to me because we turn the new page on the year 2023 and suddenly the SEC has swept into every enforcement action you can think of. And so as a business guy for four decades, that looks like CYA to me. I'm not saying it is because I also have an appreciation for how government works and how enforcement cases are developed and worked on for many, many, many months. But it it's questionable to me about how to protect investors. You have more creditors than you had ever in a case much bigger than Madoff. So I want to know what he knew in the years that he was in office leading up to that crisis.
Ric Edelman: And we have the more recent scandal developing regarding Binance and also the lawsuit against Coinbase. Let's take a look at them one by one. These enforcement actions have occurred over the past two weeks. And Binance, many argue, is kind of similar to FTX’s. What's your view of this situation, both Binance itself and the SEC's lawsuit against Binance?
Rep. French Hill: Yeah, I think it would be fair to say that Binance is similar since it's offshore and more opaque to us here in the United States. That's a fair description. And of course, the SEC is still supposed to ascertain are they protecting any US investors or US engagement with the facility, even if it's outside the jurisdiction of the US as an entity? And I haven't seen a lot of evidence on that. Coinbase, of course, is a public company in the US, which means it went to the SEC, had the SEC reviewed its S-1, and the SEC granted its approval to go public. And I think Coinbase has consistently, because of its responsibility as a public company, attempted to continue to refine its business completely in, I would say, conjunction with the Securities and Exchange Commission. And yet it's had been frustrated at every step of the way, which prompts that lawsuit.
Here's my view on all of this. Our market structure bill would clear up - I don't want to say 100% of these issues and challenges in and around all of these entities because I don't know, you know, 100% is a big statement - but I'm going to say it's going to clear up the vast majority of the assertions of what Mr. Gensler and others are saying is not being done to whatever standard Gary's set. And that's the whole problem is he won't do that. So we do that for him. And we think what we've done is consistent with what President Biden has urged be done through the President's working group on Stablecoins, through the President's working group on digital assets, through the review of the FSOC, through even the commentary in the Council on Economic Advisors annual report that came out a few weeks ago. So it's a frustrating time. And if you're in the industry, it's frustrating, but it accounts for why your financial advisors can't really, in good faith, suggest a retail investor participate in this market. How would you monitor it? How would you do due diligence? How would you custody it? How would you help advise them? How would you even be able to guide them as a friend about how they might handle it in their own wallet? So we will clear up this and we will make America a very innovative place and bring capital back to our country if we get this right.
Ric Edelman: And what is so frustrating, it seems to be a contradiction in what's going on. You articulated it very well when you noted that some half of the nation's financial advisors personally own crypto, but very few, around 10%, are talking about it with clients because of the regulatory uncertainty. And they don't know what they're allowed to say or how to deal with it. But consumers are doing this on their own. A new study just came out last week from several different sources on consumer behavior regarding crypto showing that over the past year, the number of Americans who own crypto who bought bitcoin or Ethereum for the first time rose, despite the fact that bitcoin was falling 70% in 2022. The consumer interest in this is strong, stable and rising, and they're doing it on their own without the engagement of the financial industry. So it seems to me that we don't really have much of a choice. I almost put it in the context of prohibition. We didn't stop anybody from drinking. We just made them drink rotgut. So are you confident that this will, in fact, provide the clarity that will allow the financial services industry, the nation's brokerage firms, investment advisory firms, wealth managers to engage with their clients, to provide the level of advice and services that they're providing clients and every other aspect of their personal finances?
Rep. French Hill: Yeah, I really do. And I base that on the fact that I've, as I said, four decades of personal experience in the industry. Heck, I started typing conformation with carbon paper in 1974 at a brokerage firm. So I know about this business. Yeah, I really do. And I think that then gives the investors a rubric around which how to judge whether an investment's got potential or not, including consumers. How would they participate in a tokenized distributed ledger product service offering? Give them some confidence payment stablecoins. We actually put stable in the word stablecoin in this bill and you could have confidence that you'd have daily knowledge about the liquidity and dollar for dollar representation that's being told to you by the Internet website for the stablecoin. And all of that will then also inform financial advisors. How would you get liquidity, where would you trade it, how would it be useful, or is it something that would be traded in a different way? So I think we tackle this. We tackle custody; we tackle the co-mingling issue to protect people's assets. So we've worked really hard to bring clarity here, including, as I say, based on some of the malfeasance that we've seen as highlighted in the FTX collapse or even mentioned in the assertions in the SEC complaints.
Ric Edelman: So given the current state of crypto in terms of regulatory and legislative status, what would you say to financial advisors in terms of them talking to their clients about digital assets?
Rep. French Hill: Well, I think the most important thing we can do with clients is exactly what you're doing through your association and the education you provide. I think educating people how this is going to work, how it will work, how they need to think about it from a due diligence point of view, how it fits into their short-term investment goals and longer-term investment goals. This industry has obviously been moving and developing over about a decade or more. But, a lot of people can't explain the use case for precisely how they see it coming to pass, outside the fact that a lot of people are more familiar with bitcoin as a as an entity. And I think that's going to speed up if we have a framework. In other words, I think people will now have vision on this... ‘Oh, I understand now because I see it in my own life. I see how people are using distributed ledger blockchain technology with a tokenized payment to achieve X or achieve Y or offer me a service that I didn't have access to or lower the costs to me of a service I do now...’ I see that both business to business and I see it business to consumer and of course see it peer to peer.
Ric Edelman: So having said that, it sounds to me that you're bullish on crypto that once your bill goes through Congress and is signed into law and the regulatory and legislative clarity is largely in place? But as you said, the vast majority of it clarified what this will allow. I'm putting words in your mouth. I want you to tell me if this is yes or no, that this will allow the financial services industry to have the confidence that they can engage to a degree they're not currently engaging. And that, therefore, this is sounds to me that you're bullish on this asset class and the price of these coins and tokens. Is that fair to put those words in your mouth?
Rep. French Hill: Well, I think I believe that this framework will facilitate investors separating the sheep from the goats more effectively and that they'll know what is decentralized and what is not, and they'll be able to better ascertain what has upside potential and how to measure that. And it will create a much more transparent environment and lower also the compliance risk and the structural risks that all these companies who are trying to innovate face right now. You get enthusiastic and you go, boy, that is exactly the kind of direction I think we ought to take. You invest in that token, and then you find out the whole thing is shut down by some government edict. So what I'm bullish on is transparency and clarity for investors and consumers, and I'm bullish on the framework that will bring capital back to the US and make the US an innovative area for Web3 creativity because and it's coming over a period of years. But I'll close on this one point. During the boom of the internet in the 90s, I was running a brokerage firm in Little Rock at that that time. After the Fed finished its adjustments in 1995, we had a crazy booming equity market that peaked out in the Nasdaq, what was called the dot com boom.
Well, that's inside a regulatory framework, right? And yet between March of 2000 and October of 2002, $5 trillion was lost as people tried to figure out, you know, CMGi or whatever that company was or Pets.com didn't work out or whatever. Maybe you bought Amazon at the time and you and you hung on to it and wow, good for you. But my point is, even in a regulatory framework, business is risky. Business needs transparency and risk assessment. And so investors need the advice and counsel of a good advisor, but they also need access to the data to make comparisons. And so that's why I think this bill is so important and it is an asset class that I have strong feelings is going to grow over the years. And I'll just also say if you're a crypto skeptic and you're Charlie Munger and you think it's all BS, or if you're a crypto bull and you have your hoodie on right now watching this, this webcast, either side, you want this framework, you want to help us get this framework passed in Congress, you need to be calling your member of Congress, your senator, and tell them that this is important for American innovation, American choice, Web3 future.
And I'm fearful that we're treating this like it's not a technology. And that it is a like a scam a little bit. Let me phrase it this way: Like only a scam. And in the 90s we refused to do that to the Internet Telecommunications Act of 1996, and Chris Cox, former SEC Chairman Chris Cox, then a congressman. Said of Internet resolution on the House in 1996, “We don't know what this is. We really don't know what the future of it is.” In fact, if you read that resolution, it's got all these clunky words in it and stuff. That doesn't make any sense now about the Internet. But what Chris was arguing is we shouldn't tax it out of business. We shouldn't regulate it out of business. We ought to let it progress. And then we'll tax and regulate people how they use the Internet. And Republican Chris Cox's views are in stark contrast. to Paul Krugman, famous liberal Democratic economist that I know all of your watchers here get up every morning just waiting if there's a good new Paul Krugman column to read. But Paul Krugman in 1978 said, “Hey, the Internet, it has no more macroeconomic benefit to the US economy than the invention of the fax machine.”
Ric Edelman: And so your argument is that that's where we are with crypto blockchain distributed?
Rep. French Hill: I really do. And it we're building the foundation for the use of this in business and in peer-to-peer and in business to consumer applications. Can you see it in every aspect of your life right now? No, because it is a technology that's being tested, developed, thought through different ideas, bounced around. But it is definitely coming. And I see that in talking in some of the biggest businesses in the world and see how they're already using it. And so because it's safer and easier and more logical to test things in a in a wholesale manner in a business context, that just tells me that the application of distributed ledger and digital or I should say tokenized payments, are something you're going to see roll out along with all the other innovations that we're going to see in what we call Web3, which is the next benefits of a ubiquitous Internet.
Ric Edelman: Well, Congressman, I applaud your efforts along with those of Chair McHenry in the development of this legislation. Very hopeful that it does reach passage in Congress and gets signed by the president and keep on doing what you're doing. Thank you for the time today. That's Congressman French Hill. Thank you so much, Congressman.
Rep. French Hill: Thanks for having me today.
Ric Edelman: That's Congressman French Hill, Chair, the House Subcommittee on Digital Assets with me at the fifth annual FP Vision Conference in Austin. In coming weeks here on the podcast, I'll be presenting you with additional conversations from the conference. Right now, though, you can check out the photos and other highlights of vision. It's all on my Facebook and Twitter and LinkedIn and Instagram pages.
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