Speaker unverified: belief

Transcript context

…What do you think the bite-sized early regulation will be sort of on the steps to getting a more complete regulatory framework? My view is stable coins are probably the most straightforward to figure out. Part of it comes from the Terra Luna issue. I think what that did was it awakened members of Congress to what can happen when things go wrong. This was a happy surprise. It also forced members to confront, okay, what is this algorithmic stable coin thing? How is it different from a Fiat-backed stable coin? And what if anything should we do about that distinction? I've been really encouraged by how well members have articulated that distinction and have grasped that distinction. What I think you'll probably see is some sort of law that enshrines a "payment stable coin." That language has been used in a couple of different bills. A payment stable coin is essentially a Fiat-backed stable coin. My preference would be that we're silent on algorithmic stable coins and we'll figure out what exactly that is later. Is it a security? Is it something else? Is it a commodity? I don't think there's actually a clear answer to that because they're all different. They all have different properties and they don't all work the same. I would say let's focus on Fiat-backed stable coins, because I think we all actually agree on that. Intellectually, that's not that difficult. Fiat-backed stable coins, we're really talking about, what are the reserves? What are the reserve qualities? What are the auditing requirements? What sort of attestations do they need, and what sort of redemptions and consumer protection things do you want to build into that? If you can answer those questions, you can probably define something that looks like a Fiat-backed stable coin. Algos are much harder. n my mind, there are two high-level purposes that regulation in this space could serve. I'm curious if you think that I'm sort of describing this right or thinking about it right. One is protection for the American consumer or the American investor. When something goes dramatically wrong, we look at it and we go, we don't want that to happen again, and we pass a law that makes that thing illegal. Two is giving comfort to developers that they can innovate without doing something illegal. Is that how Congress thinks about it too or are those actually the same thing?…

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