The hearing will come to order. Last congress this Committee Held two hearings examining the currency ecosystem. Those hearings we heard about some of the developments that have occurred and tha and and tr ijokerin the marketplace since e creation in 2008. The potential benefits of the Digital Currencies and the concerns about the value of stability, quality and illicit uses market manipulation and privacy. Since then facebook announced its intentions to launch the system into Digital Currency that will be governed by the association comprised of up to 100 financial and nonfinancial members including facebook digital wallet service. Facebook project generated renewed interest in Digital Currency and watching generally including how they interact with u. S. And International Regulatory potential benefits and challenges and concerns around issues like antiMoney Laundering in counterterrorism efforts including data privacy, Consumer Protections, commerce and Monetary Policy. David marcus joined the company to provide an update on the proposed Digital Currency. During that hearing, he emphasized the importance plans and commitments including that there are a number that regulators globally that are engaged o on this project including the Federal Reserve cut Financial Conduct Authority and more. The association will have the highest standards and no Financial Data collected will be shared with facebook and will be headquartered in switzerland but will still register and have oversight from u. S. Regulators. While it may have begun the conversation, the crypto currency system is diverse. It seems to me these technologies and other Digital Innovations are inevitable and could be beneficial and i believe the u. S. Should lead under development. That cant happen without the rules of the road as the u. S. Develops a more comprehensive regulatory approach, care must be taken determined the gaps in the framework. The treasury secretary said to be clear the u. S. Welcomes responsible innovation including new technologies that may improve the efficiency of the Financial System and expand access to Financial Services. That being said with respect to the other developments in the currencies the overriding goal is to maintain the integrity of the Financial System and protect it from abuse. He also noted the treasury has concerns regarding the misuse of Digital Currency by money launderers, terrorists and other data players. As Digital Currency efforts moved forward, im interested in better understanding how the technologies may infect individuals ability to exercise control over their data including the right to receive access to the data, correct inaccuracies and deletes the data. During the hearing and look forward to hearing more about how the market for the Digital Currency has grown and evolved over the last decade and a different types of Digital Currencies in the marketplace including the differences with the proposed Digital Currency, how other countries are approaching the regulations of the Digital Currencies at watching technology and what we might learn from the success and failures and potential gaps to the existing frameworks and whether distributed technology can help facilitate the privacy for individual data and approaches congress should continue in their Regulatory Regime for the currencies including ensuring individuals have real control over their data. With the appropriate balance of regulation, Digital Currencies and innovation and underlining technologunderminingtechnology e meaningful benefits and i look forward to hearing more about the ecosystem during this hearing. Senator brown. Many of us in both parties is easier from the chair voiced concerns, serious concerns about the plan to run its own currency out of a Swiss Bank Account by and large we mostly heard deflections and dodging what we mean when we say they dont understand accountability face that has proven over and over to scandal after scandal that cannot be trusted but they just dont care. They move fast and break things. But the political discourse now they want to bring the systems in the innovation and innovate americans out of their hardearned paychecks and the corporations say they want to innovate. Bankers were pitching an innovative project like facebook which claims that it will help the own bank. They ripped off millions of families that lose their homes and wrecked the economy as they become tree even worse. The banks managed to stick everyone else with the bell about the kind of innovation most of us were hoping for. So i offer innovation on the promise of improving peoples lives. But wall street banks are hiding behind innovation as an excuse to take over imported the services we benefit from and should have a say in. There are some things the system everyone in the country has a stake in. We shouldnt be having those kind of Public Resources over and asked him to do with think how hard it is to get Quality Service to know how your privacy was invaded by facebook or how much of your data was leaked and weve learned in the last 24 hours so we should be a little suspicious when someone calls us oonly big corporations can be trusted to provide a critical public service. I recently moved into a new office will. Rarely he was an innovator at the First American to orbit the earth as we know is that part of the mercury project which will be followed by the Apollo Missions and many of us that are old enough joint in the celebrations of the 50th anniversary at least some of us were old enough joined in the 50th anniversary. We all did that but remember the day 50 years ago just this month. None of the astronauts did it alone. It took the hard work of innovating scientists and engineers and most of them unknown people. They didnt do it for profit if they did it to serve their country and successes were shared by every american who is all usa on the side of the apollo 11 and its a reminder that some infrastructure works better as a public good for the big banks to get their hands on their public goods. Federal reserve and other watchdogs need to continue to be leaders in beijing innovation if we dont move quickly to improve the infrastructure not just roads and bridges in the sewer systems but the Payment System if we dont move quickly to improve if we end up with big corporations that have broken our trust again and again and again and that doesnt make any sense. I look forward to which of these technologies might actually help regular americans. Thank you, senator. Todays witnesses are mr. Jeremy, cofounder and ceo of circle on behalf of the Block Chain Association and rebecca nelson, special International Trade finance at the Congressional Research service and professor of law at the university of California Law school. Id like to assure you your testimony has been entered into the record and encourage you to try to follow the fiveminute rule by watching the clock in front of you sweet time to ask you our questions and with that lets begin in the order i introduce to you. It is my pleasure to appear before you today to testify about the promise of Digital Access and watching technology. I spent the past 25 years building Internet Technology in the united gets serving millions of businesses and hundreds of millions of consumers. In 2013 i cofounded a global Digital CurrencyCompanies Seeking to make it much easier for people and businesses everywhere to create and Exchange Value with the same is that we create and share information and content on the internet. Id like to start by touching on some of the challenges i see in the global Financial System today. Billions of people lack basic access to Financial Services and those who do have access to a system of exorbitant fees and excessive risk. The Banking System is riddled with Money Laundering and crying with annual proceeds laundered in the Financial System exceeding 2 trillion is 90 of f laundering going undetected. The Financial System is also overwhelmed with privacy violations and data breaches, cyber criminals in hostile nations can continue to take aim at the financial and restricto restrictorkava causes spiraling into the situation seems to be getting worse. Access to capital for Small Businesses is extremely limited Capital Markets preserved only the Largest Companies and those with access to the Venture Capital and very few people have the chance to even invest in the startup companies. Theyrthey absolutely can be a r future ahead despite billions of people on the mobile devices and payments will become a commodity free service on the internet. A new set of internetbased global Capital Markets built on Digital Assets will emerge opening up Capital Markets for businesses and investors everywhere, scaling from todays thousands of companies to a world where every person in the business can directly Access GlobalCapital Markets to the same ease that the access to ecommerce marketplaces. Commerce relationships will increasingly be running providing ecommerce environment with greater security, efficiency, transparency, and impossibility. A new decentralized form of Digital Identity will become available, allowing for much safer use of Digital Service and which will radically improve the privacy while more effectively sorting through the financial crime. As the new fundamental layer of internet infrastructure they will transform the Global Economic system. The significant issues are at stake and in the United States, regulatory uncertainty into the applicatioand theapplication ofe led to the loss of significant opportunities. This has had an impact on the competitiveness of u. S. Companies with those continuing to dominate the market that is backed word rather than the forwardlooking. Congress should consider new laws that protect consumers while not causing them to fixate on centuryold definition. The result of the uncertain restrictive Regulatory Environment has led many projects and companies to domicile outside of the United States and to block u. S. Persons and businesses from accessing the products and technologies. We have received a license under the forwardlooking Digital Asset business act which provides a comprehensive Regulatory Framework for companies in the industry and we are in the process of moving or International Products and services out of the United States. It is vital if we allow innovators to room to grow in the United States, congress should adopt a National Policy to define it establishes Digital Assets as a new class including appropriate rules and exemptio exemptions. Without a National Policy framework for the Digital Assets im concerned that the United States will not be the world leader in this Critical New Technology that will continue to fall behind and that will not reap the benefits of economic transportation of the Digital Assets will bring. Thank you for your increased interest and attention to this significant area of opportunity and i look forward to hearing the questions and opportunities. Doctor nelson. Good morning, chairman, Ranking Member round and members of the committee thank you for inviting the Congressional Research service to testify on examining the recovery framework for the Digital Currency and chains. Chains. Chains. The testimony focuses on the International Landscape of the currencies. I will summarize my statement with these remarks. In 2009 it was launched as the first crypto currency. They are digital representations of value. Generally administered using distributed to allergy and have no status of legal tender. Crypto currency payments are cheaper and faster. Today more than 2200 are in circulation. In terms of market size for whether they are currently a small market. Some Central Banks and multinational corporations are looking to take the currencies in the mainstream. If they move forward there could be numerous policy implications for the United States including Financial Stability, the u. S. Dollar, Consumer Protection, Money Laundering, privacy considerations and policies. First the patchwork of the currency regulation around the worlworld from and the second tg interest and third the game changer for the market. The first point is that patchwork of regulations around the world. Crypto currency or international regulated by government of the national level. More than 190 countries in the world taking different approaches to the regulatory issues presented. For example, the regulations have at it uses, Consumer Protection, security regulatio regulations, licensing reporting requirementsfor Money Laundering regulations and tax. Broadly speaking they approach across the spectrum. On one end of the spectrum some countries such as singapore and switzerland are striking to become crypto currency. The new crypto currency is a potential source of growth and to be actively attract joker into the favorable regulation and tax regimes. On the other end of the spectrum some countries including china, india, egypt and taiwan have strongly restricted crypto and hes focusing on the government control of the sector, Financial Stability and Consumer Protection. In the middle of the spectrum some of the governments are allowing this while developing regulations to minimize risk. Most economies including the United States and United Kingdom have adopted this approach. Differences in Financial Regulation across the countries can lead to instability especially crypto currency is adopted on a larger scale. The second point is that some Central Banks are exploring the creation of their own crypto currency. Some plan to develop crypto currency as a legal tender for the Marshall Islands a crypto currency code is offering to raise government revenue and venezuela launched the petro backed by oil as a way to earn money and sanctions. Iran and russia are considering the crypto currency at least in part to avoid sanctions. Others are considering making digital versions of the existing currencies directly available to individuals. For example, swedens reliance on private Payment Processing come these. The policy implications of such initiatives would depend on which countries are involved and how the new currencies are structured. The banks with most are refraining from such initiatives at this time. The third point is that facebook has the potential to be a game changer for the currency. In june they announced the proposal for the new Global Crypto currency to be used by billions of people. It would be backed by the assets, nominated in the currencies. The association of nonprofits that receive the currency is headquartered in switzerland. Many of the Details Remain uncertain. His made a number of questions to to the lack of experience in the banking sector, the size of the network and concerns about the handling of the data there are also questions about regulated and how. Earlier this month, the finance minister and Central Bank Governors agree that it raises systemic concerns as well as issues that need to be addressed before the project is implemented. This concludes my remarks thank you again for the opportunity to testify. It is rigged against average people and i agree with these concerns i spent mike grier trying to bring attention to the exclusion i of banking and why a and glad that are helping i do not believe that in the United States this is the best solution to the problem. Its a big leap forward that the problems of exclusion in the Financial System are not the result of the Faulty Technology that faulty policy. One goal is to establish a Payment System available to all. In fact, Congress Already established a public Payment System the Federal Reserve. They target to serve the Public Interest and to increase the integrity, efficiency and equity of the u. S. Payments, the Federal Reserve can and should seek to open its Payment System to all americans. Currently its only open to banks even the providers have to go through a bank. But for a host of reasons they are not serving low income and low profit customers and communities and as a result a quarter, 25 on being stored under banked and they spend billions of dollars invaluable time playing to the cached and paying practically speaking the most direct path of the inclusion is by opening the door to the already established Payment Systems. It must be updated to the system is secure in handled millions of transactions a day and is accepted by all merchant or understood. The alternative for the inclusions of the crypto currency is on waiting for the new currency to be developed into the new technological platform waiting for the wholesale adoption and use and waiting for the technological advances to penetrate the banking all by all the populations continue to spend hardearned wages and fees. Even if the Technological Solutions are around the corner and we decided this is the answer to the conclusion we wouldve th the result is highly subsidized federal Banking System for those with a game this much of the crisis was onln the very same worries. Two examples the market was deregulated because the experts promised but located new projects and investment banks relied on various of the decade of mathematical risk models for the Risk Management instead of old outdated rules not wanting to stifle innovation they would deregulate in 2002 which led to a market that no one would want as the financial regulators discovered in 2008 the risk model hadnt hedged its risk that had nearly placed many of them on the boxing counterparties. The innovation and technology wasnt a problem to problem was the humans. Some of our assumptions were made at the money market in the 1980s that were similarly deregulated. They were pegged to the dollar we have regulators for that. Theres nothing about all of these being put on the block chain that makes it less likely to it cannot undermine the Public Policy in the marketplace has evolved donating over the 2200 currency is right now. Getting this innovation and complexity it can be difficult to understand the differences between products and benefits and challenges that are raised her regulatory climate. How can the u. S. I do outline in great detail the categories of the Digital Assets. Its very easy when one hears about this to sort of assume it is all the scenes stuff so i sak one of the first things are the regulators and policymakers to really distinguish between the the digital money like this coin there are dozens of others like that that have a focus on the privacy preserving value and they implicitly have the Monetary Policy associate a polo these kind of new commodity monies need to be regulated as we have regulators and others with appropriate types of financial crimes controls as we have seen put forward in the guidance but also theres new things that happen in this space. The firms that store the assets are effectively Digital Instruments so not unlike diamonds or gold it is a generalpurpose infrastructures for the Record Keeping and Transaction Processing writing code that executed different types of contracts. The. There was regulatory uncertainty in the United States which was a primary motivating factor. Can you explain that a little better. Better. The critical issue is many of these Digital Assets do not easily fit the classifications its like a currency or a commodity to utilize in some way or has a feature that maybe makes it look like an estimate contract. Many Digital Assets have the features of all three. It makes them innovative but you can construct an asset simultaneously and its a breakthrough in how we can develop the corporate forms and how we can incentivize him to he developed the businesses and technologies. The guidance of the fcc has given its extremely lets just say narrow what they were deemed to not be a security. The majority of the assets if they were in fact treated as securities probably test applications and the guidance provided. Effectively it would mean those are not accessible to persons because the tip of the value of the assets would be possible to function if it is treated as a security. So if a mismatch between the regulatory structure that we have here a. Of the issuers can feel comfortable with their obligations and protections associated with those sensitivities and the like but dont champion jam these into te classifications we have today. To be sure that i understand your point here today. It would be part of the approach youre suggesting we shouldnt regulate this set of innovations as securities. I misunderstood the question. Yes, we should regulate these. We need new definitions of Digital Assets and there are circumstances where there are investor considerations and market considerations in the circumstances that have to deal with utility commodities. Thank you. Senator brown. Professor, welcome and congratulations. You seem like you might be skeptical of facebook claims of two weeks ago if you can cite some history when innovators and Financial Service companies and others and what actually happened in this kind of innovative Financial Services products. The one of the justifications was to provide access to credit and Financial Inclusion with the Technical Companies as well. The block chain is new technology absolutely. Maybe we will all be on it soon that is all fine but what we are talking about is a Digital Asset. Its about the value created, the assets on the block chain so it is a red herring to talk about the Block Chain Technology. We need to talk about what is going on in the markets. I dont think theres any reason to put whatever we are going to call it whether it is an investment, currency, product of value. It doesnt matter what technology undergirds that whatt matters is the risk presented by this and theres nothing about the block chain that diminishes them like the other models that we have previously. That isnt something that fundamentally changes the things that regulations are meant to combat. Discuss your skepticism of the technology alone like facebook and the crypto currencys they are not technological problems. We have the technology to provide an atm and debit card. The most requested as a debit card to take their cash into paychecks to cash it someplace, so a secure place to store their money. People want something old and dusty as opposed to a startup to invest their lifesaving. They need some way to save their money into testing digital commerce. We have over this especially in the we need to allow a bang access for the point and none of these crypt crypto currencies co that until there is widescale adoption and this would be acceptable by every single point that these people are using the payments. This may have been but theres easier ways to do it. You compare the crypto currencies in some ways of going back to the golden standards. He is companies most of it want to rewrite the Monetary Policy and go back to litigate the debates about the currency whether its a good idea. Or they have a charter to create the elastic currency thats a debate we have litigated in the congress and if we want to litigate the merits of gold versus this would be the place to do it. A lot of the currencies want to create an alternative to the currency and the u. S. Dollar. They would want to delegate that money making authority to the private market. Thank you. I will close with your comments about the Federal Reserve i think they ring true that they have the authority and ability to modernize the Payment System and im worried if they dont move quickly some company will use it to squeeze more profits from the working families and Community Banks and we will break that critical public infrastructure, so thanks for your account. I appreciate that you and Ranking Member brown had a second hearing on the issue. I think its important and i do think that block chain distributed technology has a Great Potential we have not seen a full breakout. I want to start though with professor its going to be a onetoone relationship entity that does sound a little bit like the gold standard. What would b be the effect of ts were to become an extraordinarily popular currency hell could this association acquire and hold on to enough assets to be able to allow that it was still the money created by the government. This is what they would advise that you have a basket of currencies that would be worldwide. So what happens if everybody all of a sudden invests no central issue word im not saying they cant be solved. Enough basket of currencies that would be available. If you are talking about what millions or billions of hundreds of billions or trillions potentially do you think that is what they meant is that there would be a literal onetoone . My understanding is that yes it is a onetoone based o one a mixture of reserve karen bs that they would ultimately specify. I would like to comment on this topic it is critical which is the first wave of these private monies like the decentralized private monies were very much focused on establishing a Monetary Policy audiology and this will continue to grow and forage to the degree that people are interested. The critical cases for the Financial Service sector built on the block chain and has required the development of what we refer to in the industry refers to as a stable value tokens being in a sample of the. The leading companies in the industry created a consortium to develop an open standard for the stable value of currencies to work on the block chains ex u. S. Dollar coin. I dont understand how you relegate that backing. One is if the approach of a basket of currencies, dont you have a currency risk and shouldnt there b be again some additional at least information in terms of Consumer Protection at d. Is our new money and Value Creation in a different format and this is exactly what we have here. Not to say they wouldnt have 100 reserve but what is the point we had u. S. Dollars and we want more of them. I have a few seconds left. I am open on this question there ought to be a new framework and a new structure where would you put the Regulatory Authority in the United States to be able to wave the magic wand . The development of a National Policy on the Digital Assets definition and specific rules and exemptions in a single supervisor over the firms that are regulated. You didnt answer my question. What you creatwhy do you createw regulatory system or ive run out of time where would you place this in the existing structure . Its a good question, senator. Im certainly not an expert on the efficacy of the different regulatory use and how to best organize those. I want to ask about the federal law that says only the government camgovernment can me. It was the only way that it could be conceived that an entity could create a currency so the basic question as selling okay only the government can but only these people try to do something that rhymes with that although it seems to imply with the statutory language. Not all want to establish new alternative currencies but certainly the majority of the market which is the bitcoin. And i want to be clear we creativity is because we have problems of the private issuance of claims. We had experienced what its like to have alternative currencies and purposefully put the power in the federal government. I want to see if i can find an area of agreement between you and the professor but i dont have enough time. It sounds like you think that this will democratize the use of financial products, but im sort of stuck on what she sai said ad tend to agree with what she said that there is a much more straightforward way to do that. There are publicpolicy proposals over time and things that regulators could do under thgive underexisting statutes te the process and decentralized process. What i am trying to get at is in a society in which 81 of the public currently has a smartphone that were anywhere close to democratizing the product it seems to me like they want to avoid the politics of doing things for people and saying he has a new one that was full of office staff. To speak to the limitations i dont doubt the technology that we will all be using it in two decades there is certainly a fair share focused on how to rebuild a new Global Infrastructure for economic activities. What do you do as a stark 90 of the public doesnt have access to the device to you would use to execute the transaction. Are we supposed to just place our bets on this as holding a bunch of problems and leaping over all the existing ones . I dont think so at all. The technologies developed over time. In 1990 date of the internet existed with personal computers were relatively new in terms of their adoption. Should we not focus on integrating and building the new Cloud Infrastructure and highspeed Internet Connections and come up with policies that encourage broadband adoption, should we not make those investments . Let me answer the question. The important thing here is to understand what this does and what it doesnt do. I dont doubt the potential but will that bank load low income communities and if we can persuade anybody here. So very clearly these are human issues and real policy issues that i think we have to address it with that exist significantly so this has to collaborate with policymakers. I do think that Block Chain Technology is the platform that has the ability to transform so many sectors of the Financial Sector in Energy Sector there is potential here. But china or some other country he would do so. And claiming Digital Assets are you only talking about as it pertains to the Financial Sector but then where the block chain can be used. Thank you senator i talk about this category that is often called tokens. Does this refer to cryptocurrency crack. Not necessarily you could have a token that is associated with Health Care Records or the breakthrough is that you have a public secure tamperproof infrastructure for recordkeeping and the processing of data that is more resulting in private that would be implied in Many Industries and many significant ways but with these Digital Assets built on the block chain may have some fundamental utility but that could be associate with financial characteristics and with the utility to makes that innovative and that needs to be more clearly defined in the United States in particular in order to innovate those tokens even in many other industries. Would you disagree with that but on that more sector peace cracks my concern is on the Digital Asset side. Block chain is neutral technology that can be used with all these other things but block chain has potential to be more secure and reliable but so far it has not been. It has been hack of all insecurity issues. And i still dont think its better so it could be. With the highest rate of underling adults in the state as opposed to the rest of the countries so can you expand why new Digital Currencies will not meet the banking needs of low income residents with the Banking System crack. And those are on satisfied with those current technologies. But there is no place to take their cash in nevada. Where you take your cash to put into a savings account that then gives you a debit card. There is no place because of a variety of reasons but mainly they are no longer interested in serving those customers. How does any digital based currency so how do we do that . With this block chain to be for five steps ahead of where we need to start. But dont charge three dollars per person. The answer might be looking at why they are charging a fee at the atm or why you have to have a minimum balance of 1500 before you even open a bank account. So there are problems with payments not saying they are perfect but with those accessibility issues and they have a Public Mission and we can fix that. Senator. Thank you mister chairman thank you for your testimony thank you for all of your testimony and i appreciate the series of hearings we have had on cryptocurrency and new technology. But i was listening to you and also the need right now with the realtime Payment System because the failure to move forward with this technology is something countries have already done costing millions of americans billions of dollars every day and every week. I sound like a broken record but an urge them to move forward right away to build out that master Payment System. So with that article the headline former bank ceo names his boat overdraft now that the bank is in hot water with fees but the point is those living paycheck to paycheck the inability to access funds is costing a huge amount of money and fees so can you elaborate what it is costing the public right now and how we have that within our power to move forward and this is a huge area with a bill that you introduced realtime processing is essential and you need to spend your paycheck as soon as you get it and then they just to use that to pay the rent or buy their groceries and then three or five days later than you have to go back to the bank a lot of people dont use bank accounts. And that it makes them rely on those payday loans with 300 percent apr. We just a very simple options so we need to have more compassion with what its like not to have that much money and make their lives better. And when that authority to do that right away and that you should move forward immediately with many of the global competitors. So i dont know if its high on the priority list but it should be. They are spending billions of dollars. And the fed should definitely do it. Another article called gold one go slow on the rubber faster on payments but some of us have been trying to make that the fed could do this now and then provide relief for those that dont move forward quickly or push legislation. And thank you to those who are testifying. And do you believe that cryptocurrencies are invading us quick. And then to become a cryptocurrency. And then a safe haven or is another reason. And using regulations. Its not increased regulation. Not necessarily increased but by a given a cryptocurrency market even if its out on front on that. One of the things that was brought up several times with facebook one of the things of concern how do you prevent bad actors that are financing terrorist activities so those that are looking at their Money Laundering regulations and with those with the Financial Action task force. Do you believe those regulations could apply to cryptocurrency crack. Money laundering continues to be an issue trying to get in front of the technology and regulations. So is there a way to put a regulatory design in place that will discourage money launderin laundering. I do think transparency and reporting requirements can help address these concerns the facebook fellow that was here i asked a question about what happens if the accounts get breached it has happened on occasion and the banks are taking care of it thank god. I think it happens to everybody at some point so the same thing could be applied here in his response was there is a one one backup on the dollar i dont know if you watch that hearing are not. You did . You can respond to that. It seemed to me that that was incredible to have that leverage do you think that is real quick. How those reserve assets would function. But what is safe today may not be safe tomorrow but with libra is that used as a global currency crack. You can answer this also but. Yes. So with a cryptocurrency so that would be passing to the regulators that has to be one one so if you just talked about cryptocurrency they are trying to be alternative currencies. And i am not an expert in this field at all but trying to take the dollar because you can buy it with the dollar to make a transaction on a transaction go so with that kind of a scenario which is what i interpret them would one one be something we could require without putting them out of business . It is a basket of currencies. They have the equivalent dollar amount. And there are ways to game the system and what does that mean one one . And to say this is coming and we have to be ready for it. And then we will deal with that. Thank you mister chairman. So in your report with these approaches they have had with cryptocurrency what are the Key Attributes of the Regulatory Framework is considered more accommodating how do they approach it with those other types of issues we are talking about quick. Those that try to build themselves up is trying to adopt clear regulations how the fees would operate to consumers and businesses and regulations. That said some have been described as more favorable to cryptocurrency they have Money Laundering of how they should be treated and what those Industries Need its not that they try to shirk regulations are to encourage the adoption of cryptocurrency. Not so much they try to have the wild last but that they are providing clarity maybe you could address that. As we look at the ongoing expansion it is clear to us the us regulations of what we do here and outside the us and so looking at those different jurisdictions the only thing we are focused on as a firm we want there to be an actual high bar from the regulatory perspective to be a significant serious firms and those critically the custody risk of the protection of these assets with appropriate insurance, but also a clear definition and this gets to what was said as well that very clear definitions about what constitutes a token or Digital Asset to provide that clarity to businesses who want to operate where other jurisdictions and just to know where they stand. With those jurisdictions. And with those last couple of minutes that i have help me understand those additional currencies are global so how does it do that . How does a global acceptance with jurisdictional issues and regulatory systems. If the United States were to decide whether this currency in the United States i am pretty confident they could not have succeeded in that. This is a global innovation. How word a company that wants to create a cryptocurrency that has global reach. And the challenge that we all face that some of these cryptocurrencies are just a piece of software nothing else. It exist on the internet with open source software. And with these assets are algorithms are generated. So that is a challenge every government now faces digital money will move everywhere in the world through the internet and one of the promises very specifically with those financial projections and hope that those needs can be met. And those with that as well. And to say with those Digital Assets let me ask a series of questions do we already have rules and regulations. For securities and for payday loans quick. Yes. Sort of work for etf . Are there any new that we have never seen before but now we are on block chain these are not expandable. And the technology is new and something that we have seen before. If there are really new products what about the regulations crack. Its important to have clarity we dont have to reinvent the wheel we have clarity in each of the jurisdictions to the extent of Digital Assets and already debating those models to enforce those rules. Are you concerned tex one dash that those companies reformed rules and regulations crack. And a lot of those problems that we as a society have solved and sometimes on the part of what it can accomplish and its better for Public Institutions. And to solve the problem nobodys saying is banned the block chain or Digital Currency but protect people in the way that regulations are meant to protect them in the early days of the internet lets just not worry about fixing Public Schools still have these Public Institutions and we dont go around them just because we have new potential revolutionary technology. And with that resistance to regulation does that remind you of resistance by think tank regulation crack. We need to be cautious regulators also need to imagine bad scenarios and we as regulators and congresspeople dont just need to follow wholesale is good to have innovators and entrepreneurs that have pupil visions of the future and i hope they are right but its also good to have a counterpoint. And then to imagine those scenarios. So many of my colleagues on the committee look at what happened to our Financial System years ago so what lessons did we learn from weakening regulations from a decade ago . Lessons to be apply quick. So one of the things with the leadership worldwide if we dont let them do whatever they want and we cannot compare the us Economic System and to have a stronger currency worldwide with Great Technology companies for a reason. A very strong and healthy sector but to say we will all leave to malta shouldnt let regulators think of wall street. And then. We said that with the financial crisis but then we have a trillion dollar bailout. So lets remember what happens to regulate not just all technology but similarly risk inducing. And then to compare block chains its very different and with those Digital Assets on the block chain. Its market in finance not just the markets. Getting into the data privacy issue. And to express those concerns over the collection of data on individuals and with that use of data that happens with those individuals for when dad is happening with that outlet being used. Each of you could respond to this, with this new technological innovation that we have seen with the botching technologies to enhance those privacy rights and protections and how so quick. Thank you senator. So if you step back and look at the public block chains and the structures they are designed to have a global system that is highly secure and tamperresistant with the entire operable way all over the world and with these many projects throughout the companys but with these new standards with self sovereign visual identity with the ability to have a Digital Identity those that have sovereignty and how they can access it or to demonstrate something to someone that someone is to know your age and then to have much more finegrained selective ways and then to transmit and those data breaches from those violations that happen continually on centralized services that infrastructure is designed to address it is one area i am most hopeful if you couple that with the mobile Digital Currency you can imagine to provide mechanisms that are still highly useful to Law Enforcement to pursue the bad guys. But it keeps people in control. So those are very much in front of us and those policies to cad can add elements and those that can solve some of these issues. Going beyond the Financial Transactions with this innovation or technology you are talking about cannot be used outside of Financial Transactions those that are looking to buy a washing machine and having their identity grabbed or their search identified and utilized in putting people in more control. And facebook has changed the debate on privacy and cryptocurrency but now with Facebook Libra if you could use that to have enough privacy. And then to be merged including those other platforms. And with those regulatory approaches around the world and put a global currency what regulators will want to address. To you privately want to buy drugs or terrorist or support child porn . And then to use algorithms to say she is sad and doesnt have enough but to no even though they dont know me personally but the type of person that i am. Those are the kinds of things they are two very different types of things and that is popular for people who want to buy illicit drugs venezuela and iran and other countries. Anybody else want to add to that quick. And as we move forward we will be communicating and we appreciate all of you coming today and sharing your information and expertise with us. This is obviously as a set of the out site the outset on the United States to stay at the forefront to engage to host to manage and regulate this new technology and innovation and i do believe it has some incredible potential that can be utilized for good and then to get a handle on that. So with that we are adjourned. [inaudible conversations]