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the topic is an important one for anyone who cares  about american competitiveness in the financial  

services sector a financial ecosystem that  empowers users over bank ceos and other powerful  

central decision makers and the next iteration  of the internet in which individuals are able not  

only to read information and write content but  also to own a piece of the networks themselves  

this doesn't seem like a new financial system per  se but really an extension or perhaps expansion of  

our present one well i would disagree with that um  i think what what i believe we're seeing is a new  

open infrastructure layer on the internet a  missing infrastructure layer of the internet that  

is designed around value exchange and economic  coordination that is rooted in you know immutable  

data the ability to interact with counterparties  in a very very safe way that hasn't existed  

before on the internet and really many of the  efficiencies that the internet brings in terms of  

moving information brought into moving value  but also with greater degrees of security than  

are often offered through the existing financial  system so i really do believe we're building a new  

global economic infrastructure layer in your view  is additional guidance defining clear rules of the  

road for investors and market participants needed  at this time thank you for the question we believe  

this is a very important area of focus for the sec  and this committee we do agree that the laws are  

clear however existing laws regulation and legal  precedent make it clear that blockchain tokens  

are not securities so we believe that the law  clearly shows that blockchain-based digital  

assets are one of two things either a new form of  digital property or a new way to record ownership  

as brian brooks spoke earlier about we do  believe that clarity is needed because these  

are new assets it's a new way of transacting  with these new protocols that we spoke about  

and i think it would benefit all of us in  the ecosystem to have agreed upon definitions  

i think from the standpoint of what's available  in the market today one of the things that we  

need to do better in this industry and  i think we're working in that direction  

is much like the early days of the web we need  to focus on uh consumer-oriented uh products  

that are that have a lot of information about the  the challenges and also brings the person through  

from a literacy standpoint so they understand you  look at user experience you look at ux design all  

of these things are really really important and as  we saw in the early days of the web it happened it  

came together we became better at educating the  the audience about what's available and what's  

out there the nice thing about blockchain is you  have immutability you have records that are out  

there that can't be changed this information is  already leveraged by chain analysis for example  

an elliptic to demonstrate the different things  that are happening on chain and i think it off  

it allows us the opportunity to create a lot  more foundational efforts with respect to user  

experience and focus on these consumer protection  issues that you're talking about one of the really  

innovative properties of cryptocurrency markets  are 24 7 risk monitoring and engines we do not  

have overnight risk or weekend risk or holiday  risk in the same way traditional assets do  

which allow risk monitoring and de-risking of  positions in real time to help mitigate volatility  

um we've been operating for a number of years  with billions of dollars of open interest  

we've never had customer losses um clawbacks or  anything like that even going through periods of  

large movements in both directions we store  collateral from our users in a way which is not  

always done in the traditional financial ecosystem  to backstop positions and the last thing that i'll  

say is if you look at what precipitated some  of the 2008 financial crisis you saw a number  

of bilateral bespoke non-reported uh transactions  happening between financial counterparties which  

then got repackaged and re-leveraged again and  again and again such that no one knew how much  

risk was in that system until it all fell apart if  you compare that to what happens on ftx or other  

major cryptocurrency venues today there's complete  transparency about the full open interest there's  

complete transparency about the positions that  are held there is a robust robust consistent risk  

framework applied and we're excited to work with  the cftc on our u.s license and regulated venue to  

bring a lot of this to u.s customers as well as  digital assets become more common in the global  

marketplace with the total digital asset market  reaching almost three trillion dollars as ranking  

member mchenry just said how do we ensure the u.s  dollar remains a reserve currency well mr lukemire  

it's terrific to see you again and um i'd give you  a couple of thoughts on that important question  

one is if we start with stable coins before we  talk about other crypto assets i've said for a  

long time that the secular reduction in dollar  holdings as a percentage of global central bank  

holdings is alarming and this has been going on  for more than 10 years at this point so dollars  

is a share of the european central bank the  japanese central bank etc has has shrunk from  

80 plus percent to more like 60 plus percent in a  short amount of time what that tells me is that in  

the future with the rise of china and other major  economies the us dollar can't take its primacy  

for granted and we need to start thinking about  competing on utility on features not just based on  

a post-world war ii monetary system that we could  take for granted for the last two generations  

and that's one of the reasons that i've been  such a supporter of internet-enabled dollars  

which allow us to compete on features not only on  history i think that's really critically important  

the second thing i would tell you is as we enter  year 11 or 12 of a highly inflationary environment  

after all we've been printing enormous numbers of  new dollars since the financial crisis there will  

come a time gradually then suddenly when the  attractiveness of the dollar relative to other  

currencies could change one of the benefits of  the crypto economy is that it creates some counter  

incentives on the part of the fed to do that kind  of policy because people will flee to other kinds  

of assets and that sort of market competition  is something that i think will ultimately  

shore up our monetary policy and keep the dollar  where it rightfully ought to be which is as the  

dominant reserve currency it's been for all of our  lives can you talk about the difference between  

a stable coin versus a central bank digital  currency and what advantages do does a stable coin  

offer that that a digital dollar say at the fed  would not be able to offer thank you congressman  

barr i'm happy to i think the first difference is  that uh stable coins are operational and growing  

in the market today and they're built on uh an  open internet technology model so when we think  

about all of the things that we've seen built  on the open internet on these open protocols and  

networks whether it's ubiquitous information  exchange communications interaction around  

the world that same open internet model is the  foundation for stable coins and so i think that's  

a fundamental difference a cbdc which is a con  concept right now it's not operational would very  

likely be a very closed loop technology that's  tightly administered and run by the government  

and would unlikely be accessible in the same way  that these open networks are accessible and so i  

think that's a critical difference but i i would  come back to the most important which is that  

most payment system innovations in the world have  been driven by the private sector and i think  

what's taking place today with digital currency  is is no different can you talk about some of  

the negative consequences that could happen if  we take a heavy-handed approach to regulating  

this developing technology well i come back to mr  vargas's question a second ago which i think is  

the right way to answer your question you know  mr vargas asked the question of um people have  

the potential to lose a lot of money these things  are volatile they're risky how do we protect them  

from those kinds of issues there are two ways of  answering that one is to prevent as many people  

as possible from accessing this amazing technology  for example the way the current legal regime works  

is certain kinds of assets can only be purchased  by accredited investors meaning rich people  

so the only people who can get rich on this are  people who are already rich that'd be one way  

of protecting people from losing money is to make  sure that only the richest can access it another  

way of addressing it would be to make it safer  the way that we made equities safer 40 years ago  

right we created mutual funds diversification  sector funds and other things that make it easier  

for regular americans from places like my hometown  and colorado to buy equities without having to be  

stock experts strangely in the u.s we've refused  to do that so far so we don't allow crypto mutual  

funds we don't allow people to diversify the  way that they do in canada germany singapore  

the united arab emirates and a series of other  regulated economies around the world so i would  

argue the way to win is to bring more people  into the system more safely not to keep them out  

at their own peril so i represent the south  bronx which is often said to be the poorest  

congressional district in america and of greatest  concern to me are the use cases of crypto that  

would improve the lives of the people of the south  bronx i represent a heavy population of immigrants  

who often pay predatory fees in order to send  remittances to their loved ones abroad so what  

can crypto blockchain web 3 do for that dominican  immigrant in the south bronx who is burdened by  

remittance fees that she cannot afford how much  more affordably and quickly can the crypto economy  

facilitate remittances mr cascarelli if you  could take that question and please be specific

yes uh thank you for the question um i think this  is a really important element of the technology  

which again is that it's open to anybody  you don't need to have a bank account  

you don't need to in fact rely on any intermediary  so somebody who's an immigrant and wants to send  

remittance to family member another country is  able to do that and um there's ways to deal with  

both crypto and to do it with a stable coin  and all you need to do is download a wallet  

and then you can send it to somebody else anywhere  in the world and so this is a really powerful  

tool for democratization of access especially for  those who have difficulty getting bank accounts  

there's no minimum fees there's no minimum  balances there's no check cashing fees that are  

part of this technology and you can do it in some  cases for you know a penny or less one bitcoin  

transaction a single purchase sale or transfer  uses the same amount of electricity as the typical  

u.s household uses in more than a month and so  this is really outstanding to me and many folks  

do not uh know this many americans and folks that  are talking about this issue and so miss dickson  

can you explain why for a cryptocurrency like  bitcoin that rely on proof of work model mining  

is such an energy intensive process thank you  for the question this is a really important  

area obviously in terms of sustainability  and the focus on what we do in this space  

we should always be trying to do it better and  much more efficiently uh the in bitcoin is the  

proof of the the way that bitcoin consensus is  achieved is through uh really complicated math  

equations and so there's a lot of energy that's  needed to be used to be able to make that happen  

i know best about the the consensus mechanism on  stellar which is the stellar consensus protocol  

which can be done on a very small computer  any of the ones that you have in front of you  

and the uh it consider we had a university of  london did a study on the stellar network itself  

and the uh network is is low in terms of energy  consumption it's around point zero zero zero  

two two kilowatts per hour for each transaction  that's less than a transaction for visa so that's  

a really important comparison for us all to think  about so not every consensus mechanism is proof  

of work or proof of stake again there are many  many different ones out there and depending on  

the mechanism it depends on the energy consumption  but it's definitely important for us to be able to  

try to do this better more efficiently and to  consider the sustainability concerns around it