On April 11th, Beijing time, the heads of the seven major US banks gathered in the US House of Representatives to participate in the hearing of the Financial Services Commission. Presented to the MPs the status of banking reform since the 2008 financial crisis. In addition to the seven major banks creating jobs for the United States and helping small and medium-sized businesses, blockchain and cryptocurrency have become a hot spot for this hearing.
Warren Davidson, a member of Ohio, asked questions about Goldman Sachs CEO David Solomon, JPMorgan CEO Jamie Dimon, and New York Mellon Bank CEO Charles Scharf about cryptocurrency and blockchain in a limited five-minute period.
- US Congressman: Encrypted currency is related to national security, the government should avoid double taxation
- New York State updates the Property Collection Act to allow the government to confiscate unclaimed bitcoins
- SEC Chairman: The cryptocurrency is not stocks and bonds
- Member of Parliament: For innovations such as Bitcoin, the United States should give "yes" by default.
- Fighting the SEC! They launched a cryptocurrency donation campaign to update the outdated Howey test only
- The new chairman of the CFTC issued a statement: We do not want to kill cryptocurrency innovation
I believe that Davidson's question is also a hot spot for the cryptocurrency community. For example, whether the cryptocurrency trading platform of Goldman Sachs is true or not, why did JP Morgan issue the Morgan Coin after dissing the Bitcoin, and whether the bank is likely to host the crypto assets.
(Member Warren Davidson)
Davidson's attitude toward cryptocurrency and blockchain has always been very friendly. He submitted the cryptocurrency regulation bill last year and this year, hoping to keep the tokens from US securities laws. In this hearing, he is also one of the few members who focus on emerging technologies.
The following is a record of the hearings compiled by Babbitt (there is a deletion that does not change the original intention):
Warren Davidson: As the Internet continues to evolve, we are entering a new era of innovation. At this stage, the blockchain is transforming our financial industry, cybersecurity, and the way entrepreneurs and startups raise funds. The world is competing to gain the advantage of this new technology, and the United States has fallen behind, mainly because of regulatory issues.
The market needs to protect consumers and empower innovators and entrepreneurs. My colleague and I have submitted relevant drafts in the near future, hoping to bring certainty to the regulation in this field, so that the United States can gain the advantage of this emerging technology.
Mr. Solomon, I will share a paragraph, which I read recently in an article.
"According to Bloomberg reported in December last year, Goldman Sachs plans to set up a cryptocurrency department by the end of 2018. However, on September 5, Business Insider reported that according to unknown insiders, the regulatory environment in the cryptocurrency sector is unclear. The company will abandon the cryptocurrency trading business."
Mr. Solomon, I would like to ask, why did Goldman Sachs set up a cryptocurrency trading department?
(Goldman Sachs CEO David Solomon)
David Solomon: The first thing I want to say is that these reports are inaccurate. Like many companies, we are waiting to see and try to understand it in the process of developing the cryptocurrency market. We do have some clients who are engaged in related futures investments, but apart from that, we do not have plans to open a cryptocurrency trading platform.
We may do this in the future. However, there are still some problems in dealing with cryptocurrencies. This is a brand new field and there is uncertainty in regulation. And in the long run, we are not sure that this technology will eventually be viable as a currency. Warren Davidson: Obviously, some tokens need to be clearly defined, whether they are classified as securities, which platforms are suitable trading venues, and so on. Mr. Dimon, in 2017, you said that the cryptocurrency is 'not real', but this year, your company launched JPM Coin and said 'we support cryptocurrencies as long as they are properly controlled and regulated' . Why is there such a change?
(JPMorgan Chase CEO Jamie Dimon)
Jamie Dimon: The blockchain is real, it's a technology that many people use and test today. We believe that over time, it is feasible. Although this project is true, there is really nothing in the cryptocurrency. For the next person who buys the bill, there is no value behind the cryptocurrency. This is a serious problem.
The Morgan Coin is a token that is supported by JP Morgan Chase’s deposits. It can be circulated in real time around the world and can be exchanged for cash. Warren Davidson: You mean that the settlement of the Morgancoin is instantaneous and is carried out through a blockchain distributed ledger. How does this process lead to a better payment system if done properly?
Jamie Dimon: Today's payment system costs are really low, but the new system may be faster, along with data. Everyone can get the same data at the same time, we can view the transaction process on our own computer screen.
Warren Davidson: So the essence of the blockchain is more transparent?
Jamie Dimon: Yes, it must be secure and must be 'permitted'. Not everyone has the authority, because we need to ensure that the process of transferring funds is absolutely safe.
Warren Davidson: Thank you very much. When it comes to emerging areas, we have to consider the protection of consumers. Regarding the custody of digital assets, there is currently no platform for regulatory approval. Mr. Scharf, your company's policy on cryptocurrencies listed on the website is as follows: New York Mellon Bank sees unclear regulatory policies as an obstacle to providing digital asset custody services. Can you explain this policy and point out other regulatory obstacles your company faces in this area?
(Charles Scharf, CEO, Bank of New York Mellon)
Charles Scharf: Ok. As mentioned on the website, the regulatory policy is not clear, I think this is one of the obstacles. Frankly speaking, the development of cryptocurrency is still quite early, and as a real currency from which value is transferred, they are not important at this stage. Therefore, we are also actively considering our next move. One of the biggest problems we face is AML and KYC.