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US Congressman Patrick McHenry is introducing (again) the Financial Services Innovation Act (2019), which first saw light in 2016. If passed, this would require the federal regulators to create Financial Services Innovation Offices (FSIOs) within their agencies. These will act as spots for permanent beta testing in which entrepreneurs can apply for regulatory approval.
In an interview for Laura Shin’s Unchained podcast, McHenry stressed the need to identify and acknowledge the potential of innovative ideas such as cryptocurrency and in particular Bitcoin(BTC)trade. Unfortunately, due to subsequent oversights by the U.S. government, these ideas have never really been able to take off in the region.
McHenry said that until the past 2-3 years, any action by the government was negative for crypto and based on an impaired perspective of these innovations. According to him, that was the major reason why cryptocurrencies’ development was restricted, and their enormous value was never truly realized. It’s far better, he continued, for Capitol Hill to slowly become more informed about the industry “rather than rush to go kill — or try to kill — an idea.”
The congressman said that there was a need to have smarter regulations so that you could have money brought to bear for these innovations to take place. In this regard, CFTC, and the SEC, as well as the Treasury and the IRS need to promise some certainty to incentivize entrepreneurs to keep coming up with interesting innovative ideas.
McHenry has been an ardent supporter of cryptocurrency and sees more than just an opportunity out of it. In the past, he has said several times that financial innovation is critical for the nation’s competitiveness.
According to him, an average American consumer has to manage his/her financial accounts from saving for college to accessing capital to start a new business. The demands of an average consumer have drastically changed in the 21st century. “Outdated government regulation should not stand in the way”, said the congressman.
The congressman was hopeful that with his new bill, “innovation-forward” and “innovation-permissioned” regulation will be ensured. According to him, no matter if you are a small community bank with a new idea or an entrepreneur just trying to surf through the complex financial regulation, the bill would ensure that the regulators pose no barrier to innovation.
Ongoing Political Debate about Crypto
There is an ongoing debate in Congress with regards to the legality of stablecoins. Many members of the congress believe that stablecoins such as Facebook’s Libra pose a serious financial threat.
McHenry believes that members of Congress should widen their understanding of blockchain and cryptocurrency, and realize the true potential that these technologies have to offer to the 21st century American consumer.
Although McHenry is still an unusual political voice defending cryptocurrencies and stablecoins suc as Facebook Libra, he is not completely alone. Just recently, Senator Mike Rounds also expressed his support of Facebook upcoming digital currency.