00:00Thank you, Mr. Chairman. Ms. Soule.
00:04First, before I begin, I want to have this article from Reuters entitled,
00:10Crypto Exchanges Rushed to List Trump's Coin, Leaving Many Losers and Some Big Winners.
00:17Can I please submit that for the record?
00:20Mr. Frayer, is it normal to, like, have in one day a coin listed?
00:26I mean, I know that you know the regulatory process, but I think that in one day to have our President's coin listed was pretty fast.
00:35It is genuinely unusual. Kraken was the first to list the coin.
00:41I think the President announced it at 9.30 and by 1.30 the next day they had it trading on Kraken.
00:48And I think even Coinbase acknowledged that it was not normal under their process to list it so quickly
00:55and it wasn't something they may have listed, but they said essentially the demand was high.
00:58Just for the record, wouldn't it be great if we had ethical rules that limited politicians who have power to sign laws,
01:07make laws, limit their ability to do that while they're in office?
01:11I think that's really important just for faith and democracy and fairness sake.
01:15Yes. You know, I started by talking about my Alabama district.
01:19My Alabama district is a civil rights district, so it's historic cities like Birmingham and Tuscaloosa and Selma.
01:26But it also includes a lot of the rural communities of the Black Belt where people are unbanked or underbanked.
01:33And so for far too long the families in my district have had limited access to capital, full stop.
01:39And as we explore this stable coins and digital assets, I know it has both promise and perils.
01:48I just really think it's really important that we think about the accountability.
01:53You know, innovation without accountability I believe is no blessing.
01:58And the folks who tend to be most hurt by that are those that are not financially savvy.
02:04So it's really important that we get this right.
02:08So I wanted to talk to you about the Genius Act.
02:10Do you think that the Genius Act, you know, is it the best we can do in terms of regulatory?
02:18And if not, what do you think the biggest peril is?
02:21I really don't think it is.
02:23I think essentially what the bill does is make it easier for non-bank stablecoin companies to get access to the Fed master accounts.
02:30They promised a different infrastructure for doing payments and now they want access to the public infrastructure that we already use.
02:36And so I think they should compete on a level playing field with banks.
02:40And so when you take that kind of activity out of well-regulated banks, it puts the economy at risk.
02:46And ultimately it's taxpayers that have to bail it out.
02:48Thanks.
02:49In terms of the IRS, do we currently have the tools and the manpower that we need to actually regulate or to collect taxes on these kinds of transactions?
03:01And I know that the settlement is really, really important and want to know your thoughts about how we can do that better.
03:08I'm not a tax expert.
03:09What I will say, my understanding is that the IRS is not well staffed.
03:14And I think that makes it a real challenge to deal with new issues in a marketplace that moves quickly and where anonymity or pseudonymity is a big issue.
03:25So, yeah, those are challenges.
03:27Ms. Riley, I know that you are a tax expert.
03:30Can you talk to us about the crypto industry and the type of tax regulations that will help protect consumers?
03:41Sure.
03:42Thank you for the question, Congresswoman.
03:45At Fidelity, we are very concerned with protecting our investors, particularly kind of your everyday retail investors.
03:53I think one of the issues right now is the lack of certainty and consistency.
03:57I think that makes following, you know, compliance very challenging for everyday investors.
04:03They also may struggle to understand the tax consequences of holding digital assets.
04:09And I think that that hurts both the industry, but it does hurt your everyday investor.
04:14And I think, for example, exchange traded products are how many retail investors may have exposure to digital assets because they can hold them through their individual retirement accounts.
04:26They can hold them in their brokerage account.
04:29There currently are some, you know, challenges and complexities in those rules in terms of giving those investors full exposure to the value of those assets.
04:39I want to yield back.
04:40Yep.
04:41Sure.
04:42Reclaim my time.
04:43I only have 30 seconds.
04:44I have 30 seconds.
04:45And I really want to just go on the record of saying that financial innovation is critically important.
04:49I remember in the 90s when we had derivatives and people didn't understand derivatives.
04:53And we rushed, I thought, to actually passing a law, laws and regulations that weren't, that had unintended consequences, if you will.
05:02And so while I am absolutely convinced that we as Americans should lead in this industry, and I do know that the Europeans are, and other global countries are right behind us.
05:13But I think that it's important that we don't sacrifice accountability in the name of, in the guise of financial innovation.
05:22And I, as a lawyer in New York, used to do derivatives, and people didn't understand it at all.
05:29And we had to ultimately correct stuff through the Dodd-Frank legislation.
05:33I say all that to say, Mr. Chairman, we have a big task ahead of us, not only for the regulatory framework, but also for the tax framework.
05:41And it's one of the reasons I'm elated to have you as the ranker.
05:45Ms. Fischbach.
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