Senator Pat Toomey's Concerns about the SEC & Crypto

Bankless Nation, we are live here with Senator Toomey. Senator Toomey is a senator, Republican Senator from uh Pennsylvania. He's also a ranking member of the Senate, Banking, Housing, and Urban Affairs Committee. This is a very important uh committee. He's also in the past been somewhat friendly to crypto and some of the things we've been up to. Senator, welcome to Bankless. It's great to have you.

Thanks for having

Can we start with the big picture? We want to cover a few things today. Um, we want to talk about FTX and some other things, but can you give us the big picture of the upside, the potential that you see in crypto? Why have you defended it before and how do you think it might help the American people?

me.

Well, so here's the way I think about this. Um,

when the internet first came along and we could exchange emails,

that was great.

And at that point,

it never for a second occurred to me that someday,

like

all consumer products would be happening uh over the internet, that I'd be able to use an iPhone to.

Hail a car. I mean, the list is endless. It was so transformative of our entire economy.

So now I look at what crypto means to me,

and I think of

different crypto projects as like these various protocols. And a lot of them are like

operating systems on which people can run these apps that are going

to do all kinds of things that probably exceed my imagination as much as.

Everything we take for granted today exceeded my imagination back in 1999 when I first started doing emails. So

I don't know all the way. I mean, there's the obvious categories like payments and identity verification and ownership issues and

things like that. Those those are already uh pretty clear. But I I think the potential

of this

sort of freestanding, independent, uh disintermediated

uh software.

Is enormous. And

I'm not

necessarily sold on the value of any particular token, but I don't think it's really about the value of individual tokens. I think it's about the underlying technology.

So your argument is this is an important underlying technology uh like the internet. It's innovative in that capacity. Can we frame the question another way and ask it the opposite way, which is like, what's at stake if the US misses crypto? Let's say I mean the US is very supportive from a regulatory and legislative perspective of the internet in the 1990s.

Right.

What's at stake if we don't take a similar approach to crypto now?

Well,

an amazing, maybe completely transformative wave of technology happens somewhere else.

And someone else. And I don't know where that is. It maybe it's dispersed, maybe it's concentrated. Probably happens in a context that's not entirely consistent with things that we value very much, like the rule of law and intellectual property and privacy.

And who knows, the kind of jobs and the economic growth that we would be foregoing.

And frankly, probably even national security issues. So I think it would be

unbelievably misguided for us not

to create an environment where Americans can drive this technology.

Is Capitol Hill talking about maybe what China is doing in the blockchain space? Just like there are different kinds of kinds of the internet, there's the open internet, and then there's sort of a more closed internet behind firewalls. China's very active in what it what it calls like the blockchain space, but it has its own centralized um technology that's kind of replacing it. Is there any talk in Capitol Hill of what some of uh America's competitors are doing?

Uh, you know, and you're keeping up with them, or like are we even talking about that right now?

Yeah,

there's some discussion about that. And one of the ways that comes up a lot is a discussion about a central bank digital currency. As you know, the Chinese have already deployed one to a pretty significant extent.

And look, I think their motivation is pretty bad. I think a lot of their motivation

is the dramatic extent to which it enhances their ability to surveil their population.

And they would love to see adoption everywhere it's possible because then they could surveil everyone else too.

I don't like the idea of authoritarian regimes having those powers. By the way, I don't want the US Federal Reserve to have those powers either.

But to your question, yes, it's come up.

And one of the one of the questions that people have wrestled with is if the Chinese are using a technology that allows their currency to be used in ways that a dollar can't.

Does it give them an advantage

and give them an opportunity to erode the presence of the US dollar as the leading reserve currency in the world? My own view is

there are other reasons why the dollar is the reserve currency of the world.

And it's hard for the Chinese to displace us, especially given their closed

and authoritarian society.

But

why wouldn't we want to have the most technologically sophisticated?

Currency in the world. By the way, that doesn't mean a central bank digital dollar. I think stable coins

issued by private issuers can play that role.

But

I want the dollar to, it's a huge advantage to Americans for the dollar to be the leading reserve currency.

And having stable coins proliferating

would enhance that.

Senator Toomey, I know you're a big uh proponent of some some stablecoin regulation. I definitely want to get there uh later in this conversation, especially uh after we talk about some of the uh the the role that the SEC has to play and how crypto is regulated. But of course, uh we would we would be remiss to talk about or not talk about the fallout of FTX. And I'd just like to take a peek into what the current state of Capitol Hill is uh now that we are hearing this news about FTX. Uh what is the gossip? What is the conversation that's happening with regulators on Capitol Hill about this news?