Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
Ep 30: Congressman Wiley Nickel
114 Plays5 months ago
Congressman Wiley Nickel, member of the House Financial Services Committee, joins Norma Krayem from Van Scoyoc Associates to discuss the critical topics of blockchain, digital assets, and regulatory certainty in the United States.
Recommended
Transcript
Introduction to Hootenanny Podcast
00:00:06
Speaker
Hello and welcome to this OWL Explains Hootenanny, our podcast series where you can wise up on blockchain and web3 as we talk to the people seeking to build a better internet. OWL Explains is powered by Avalabs, a blockchain software company and participant in the avalanche ecosystem. My name is Silvia Sanchez, project manager of OWL Explains and with that I'll hand it over to today's amazing speakers.
Blockchain Regulation and the House Financial Services Committee
00:00:34
Speaker
Welcome everyone to the OWL Explains podcast. This is Norma Cram, Vice President and Chair of the Cyber Privacy and Digital Innovation Practice at the Fanswag Associates. And we are going to spend just a few minutes with a wonderful member of Congress who has been working very, very hard on some critical topics, blockchain, digital assets, and how we can bring regulatory certainty to the industry here in the United States. So first, Congressman, welcome.
00:01:01
Speaker
Hey, it's great to be with you, Norma. Thanks for having me.
00:01:05
Speaker
Well, before we jump in, I do wanna make sure that our audience understands what an amazing background that you have. And for those listeners, the Congressman is a member of the House Financial Services Committee, where he serves on the Subcommittee of Digital Assets, Financial Technology, and Inclusion. He's also a leader of the Financial Literacy and Wealth Creation Caucus, which focuses on important issues around the independence and success for all Americans.
00:01:32
Speaker
He represents the 13th District of North Carolina and is a well-known bipartisan lawmaker who works across the aisle to get things done. And certainly in this environment, Congressman, we probably need to clone you times 10. So we thank you for all that you do. And I know we've got an active list of issues you wanted to talk about today. But before I do that, are there any sort of thoughts you'd like to start with?
00:01:58
Speaker
This is a really exciting area for if you care about good public policy.
Bipartisan Digital Assets Bill
00:02:05
Speaker
The US Congress has never voted on any major legislation for digital assets, for crypto. We are finally getting around to this issue for the first time in our nation's history. We're still dealing with securities law from 100 years ago to try to deal with
00:02:26
Speaker
you know, crypto and blockchain and Web3. So exciting times in Congress. We just had our first vote, you know, on this area with a CRA on SAB 121, which we can get into. But next week we're coming here to the House and we'll vote on a bipartisan bill that would for the first time provide meaningful regulation and consumer protection for this industry. And I'm really excited about it.
00:02:56
Speaker
Well, thank you for that. You know, you're right. This is an incredibly exciting time and you have worked tirelessly within the Congress to try and move this bill.
FIT21 and Financial System Innovation
00:03:06
Speaker
And for those listeners, the bill is called FIT21 or the Financial Innovation and Technology for the 21st Century Act.
00:03:15
Speaker
and trying to bring together two committees, the House Financial Services Committee and the House Agriculture Committee, to agree on some very wonky things about securities and commodities is definitely not an easy thing. But Congressman, you have been a leader on the committee on these issues. A bill that came out of committee included one of your amendments, which really talks about that need to foster and advance blockchain technology
00:03:42
Speaker
to assist our financial system. And one of the things before we talk about maybe the bill itself is we certainly spend a lot of time on OWL Explains and Ava Labs trying to explain the differences between blockchain and crypto and digital assets. And I think it's important for our listeners to understand even some of those basic differences or how you think about them. So why don't we start there first? You know, I mean, the technology, you know,
00:04:12
Speaker
For me, it's just all about the potential for innovation. And there's so many different ways you can use this technology that have nothing to do with crypto that can truly revolutionize our financial system. By using digital assets the right way, we can create a more fair and equitable access to financial services for everyday Americans.
00:04:34
Speaker
you know, enhancing transparency, reducing transaction costs. That's a huge thing for me, bringing down those costs and increasing efficiency. So, you know, Web3 is going to truly change the way we're able to move money around and deal with our financial system.
00:04:54
Speaker
And you're gonna look back in this issue in 10 years and the people who are opposed to it are gonna be like the people who are against the internet. So if you're taking a long view on this, this is amazing technology and it has the potential to truly change the way we deal with financial services. And that's such an important issue. Thank you for focusing on that piece. Because when we talk about blockchain, is that really the base layer technology,
00:05:24
Speaker
worked on in the public policy realm for so long is differentiating those use cases. So blockchain that's used in the financial services sector, as you've just talked about, really does benefit from having some rules on the road and some clarity, because we want our US companies to stay here, but they need to understand what it is, how the rules actually impact them.
00:05:48
Speaker
And FIT21 is really designed to do that. And I know we're about to embark on a historic moment, maybe next week in the Congress, to bring the bill to the floor. And there are many who are supporting the bill and others who have some concerns. But what would you say to those people, both for and those who have concerns about why this bill really does need to move in this Congress and now?
Consumer Protection and Regulatory Clarity
00:06:15
Speaker
Well, you know, it's a simple answer. Whether you love crypto or you hate it, you should want to have regulations for the industry. That's what this bill does. It provides regulatory framework and it protects consumers. And right now we don't have any of that. We have no real clear rules of the road, tons of regulatory uncertainty. And we have an SEC that's just way out of line with the rest of the Biden administration on these issues.
00:06:41
Speaker
We had a great executive order from President Biden when he came into office talking about Web 3 and the potential for this technology. And an SEC that I think is very out of step and really giving the Biden administration a bad name on this issue. And frankly, making this a partisan issue. This should not be a partisan political issue.
00:07:03
Speaker
at all. And so that's what this bill does. It provides that regulatory certainty, a regulatory framework that we don't have. And again, when we're talking about these issues in Washington, we're dealing with securities law that's 100 years old, this Howie test.
00:07:25
Speaker
So, we have the chance to do this, and the work we've done has been bipartisan on this issue. I was a group of six Democrats who joined with my Republican colleagues to move this bill forward through the House Financial Services Committee. That's a big deal for Washington.
00:07:41
Speaker
It's hard to get things in this bipartisan category, but as more people learn about the bill, I think we're going to have a really good bipartisan showing on the floor of the House next week. But this is an issue where if you care about it, you got to reach out to your members of Congress because this will be a very important vote for the industry and for this technology next maybe Wednesday or Thursday.
00:08:09
Speaker
Thank you for that. I mean, it is really critical, I think, for those who are following these issues to really engage, as you've just said, with members of Congress to express your support or, you know, there are areas that you might want to amend. There's a very small period of time to do that, but we certainly have the opportunity in the Senate
00:08:32
Speaker
And I think what we're really talking about to encouragement, you alluded to this is we really do need to help educate more members of Congress about digital assets and their importance and really digging in a little bit than the differences between blockchain and crypto. And so how do you think our listeners and people in general should help do that? How do you think we can maybe break through what has also been a little bit of
00:09:01
Speaker
that partisan divide that you've mentioned that we need to move beyond.
Competitive Edge through Blockchain
00:09:06
Speaker
Yeah. I mean, it's explaining those good use cases. We needed to help Ukraine early in their fight for freedom, and we were able to move resources to them through the blockchain. You're talking about cross-border payments can be really difficult sometimes. Through the blockchain, you can move money quickly, efficiently, and in a very safe and secure way.
00:09:28
Speaker
I want to bring down costs for the folks that I represent. And this technology has the ability to do that in a massive way to promote financial inclusion and truly change the way that we interact. Also really important as you talk about these issues is that aspect of financial inclusion. And certainly as we think about the role of technology and the internet, more people have access to it.
00:09:56
Speaker
And you have spent so much time of your career to actually bring these two issues together, again, which is the financial literacy and the desire to bring clarity to the regulatory environment and talk about the benefits. How can we help people understand that these can all go together? How do we talk about that message of financial inclusion and really accessibility on top of the value of a bill like FIT21?
00:10:23
Speaker
You just got to talk about the specifics of it. When you're talking about blockchain and financial inclusion, it has the ability to make supply chains more transparent and secure, can improve the customer experience for tickets to sports and concerts, can improve the privacy and sharing of medical records and healthcare. The list goes on, but it's really just sitting down with
00:10:49
Speaker
with members of Congress who have a lot on their plate. We deal with a lot of things at once, but just explaining how it's going to help American consumers and just stepping back to
00:11:02
Speaker
you know, having, you know, we have a choice to either keep this industry in the U.S. or send it overseas. And if we do that, you know, the folks that we all represent here will have no way, no recourse if they get screwed on these, you know, with something involving this technology. You know, we want to regulate it here in the U.S. and that's something that Democrats especially should be supportive of. Absolutely. I think ensuring that we have
00:11:30
Speaker
a very robust industry in the United States with those matching protections are things that I know you have continued to work on and we will continue to help educate with you. You referred to a really important point, which is that some of the regulations on the books, particularly the SEC, are over 100 years old. And I know that there have been many congressional hearings with the SEC about needing to manage and address these issues.
00:11:59
Speaker
Is it that we're just trying to move beyond what is an old structure and that is taking a long time with the SEC? Or honestly, maybe most people believe that this legislation is needed because we can't quite get beyond some of those challenges you mentioned with the SEC. I think for a number of reasons, we need the legislation. But Chief among them is, we have an SEC that's openly hostile to
00:12:29
Speaker
digital assets and crypto, and the regulatory uncertainty is immense. So we continue to see over and over regulation by enforcement, which is sending innovation overseas. And that's a bad thing if you care about the strength of our financial markets in 10, 20, 30, 40, 50 years. We have the best financial markets in the world, and we need to continue to
00:12:59
Speaker
be strong with the digital dollar now and in the future. And this support for this industry is crucial for that. But the SEC is far out of line, I think, with the majority of the Biden administration. And by having legislation and regulation on this issue, we're going to have that clarity where folks like Gary Gensler can't operate on their own. And that will be a big deal.
00:13:26
Speaker
for the industry and for keeping that innovation in the U.S. And this issue with the SEC is playing out in real time. Sometimes we have fights about things that are kind of proxies for other things, but we just passed a CRA on SAB 121. This is pushing back on the SEC. We had 21 Democrats in the House joining
00:13:56
Speaker
with my Republican colleagues to move this legislation forward. It just passed the Senate with 12 Democrats voting in favor, including Senator Schumer, of this pushback against the SEC. We're seeing a real shift here, and I think that's an important point to make with what's happening right now this week in Congress.
00:14:24
Speaker
And for our listeners, this area is the Congressional Review Act, which allows Congress, in instances like the Congressman is talking about, to overturn certain regulations, obviously for the detailed reasons that the Congressman just mentioned. And the vote, as you said, Congressman Nickel, in both the House and the Senate was quite noteworthy. This is not a tool that we've seen Congress use every other day. And it is impactful in hopefully sending a message to the administration.
00:14:54
Speaker
that we need to realign, as you so eloquently said, where the SEC is on some of these issues and to have a more balanced approach. So we'll wait and see what happens with that, I guess, in the next few days. But as we think about that, in addition to trying to fit 21 in the passage of the CRA, as you mentioned, there has been a separate bill focused on stablecoins. And there seems to be a more bipartisan approach or
00:15:24
Speaker
perhaps an easier path and discussion on these issues in the House and the Senate. So what's your view on stablecoins, the role in the economy, and the need for regulation as we try and move that bill as well? Yeah, this is a place of what I think we're going to see very soon, very good bipartisan agreement. This will be one of the
00:15:43
Speaker
really important pieces of legislation we can move forward on the federal level here for stablecoins. Our chair, Republican chair Patrick McHenry, ranking member Maxine Waters are very close to having agreement on this issue in conjunction with the Fed and the Treasury. But we have a bill that, again, all sides are very, very close on that would put a regulatory structure in place for stablecoins in order to
00:16:13
Speaker
continue to protect consumers and encourage innovation. And there's a very strong economic competitive case for stablecoins.
00:16:21
Speaker
We can't fall behind and let other jurisdictions beat us in this space. It is first and foremost for me about the strength of the digital dollar now and in the future and providing this legislation and moving it forward in a bipartisan way, I think will be a very strong signal that our financial markets want to continue to keep pace with the rest of the world as we're talking about stable coins.
00:16:47
Speaker
that it is so critical to reinforce the importance of the digital dollar, right? Technically, we might argue that that exists in a different way, but the stablecoin legislation is critical to addressing some of those issues. And as you alluded to on this topic and in others, you know, we are in a race, the term we use on the national security side with our near peer competitors in many respects, but we're seeing nation states around the world looking to create their own
00:17:16
Speaker
version of a digital currency. And that is obviously a direct attempt to take away the force and power of the US dollar. We're seeing other countries create bespoke blockchains, which give us national security concerns. And so I know when we talk about these issues, at least just on the tech race, not every member of Congress focuses on those quite as much.
00:17:42
Speaker
But maybe just give us your thoughts about this broader issue because we are trying to also protect US innovation and really just the role of democratic values here and around the world in a different way with these financial instruments.
Stablecoin Legislation and US Influence
00:17:57
Speaker
No, 1,000%. This is a national security issue in a major way. The US dollar is the world's dominant currency. And that gives us incredible economic privileges. Our sanctions are much more effective. But we're seeing challenges to the dollar's influence with shares of dollars in global currency reserves decreasing since 2015. And we can't afford to lose the dollar's status. So if we lose that status, again, our sanctions
00:18:27
Speaker
critical part of our national security policy will not be as effective, but passing stablecoin legislation is going to reinforce the dollar's dominance and making it stronger, more competitive, more accessible. And if we're going to continue competing on the international stage, that means strengthening the digital dollar because that's the way more and more in the future we're going to be doing transactions.
00:18:51
Speaker
And I think that's when we talk about that broader education that we all need to focus on, both in industry, public and private, and with members of Congress. It's such a critical point for people to understand that it's not just a debate we're having in the United States. It really is a much larger issue about maintaining the US's role around the world. When we talk about the national security issues too, there are many times now, I would say unfortunately, that there
00:19:20
Speaker
that there is a complete maybe misunderstanding in the role of where digital assets play. There has been this discussion about the nexus between ransomware attacks and demands for digital payments and Bitcoin and others. And we've seen this shift by some in Congress to really attempt to say that this industry is just reinforcing
00:19:47
Speaker
the attackers and is a much easier way for illicit finance and other things. And as long as we've had a real dollar or a digital dollar, we've had ways to address these issues and problems.
Blockchain's Role in Law Enforcement
00:20:00
Speaker
So from your view, how do we, one, talk about these issues maybe differently in Congress, and two, attempt to assure people that some of the laws and the books we already have can easily be applied to this industry, just like we had to when we're talking about paper currency.
00:20:18
Speaker
I hear the concern, but as I talk to those in federal law enforcement over and over, the point that they always make, and I've seen it play out over and over, is how secure this technology is. When we're talking about blockchain technology, our law enforcement has a much better ability to track exactly what is happening, to see where the money is going, because it's all out there on the blockchain.
00:20:45
Speaker
traditional, you know, financial banking and the way we transact Monday is much harder to track.
00:20:52
Speaker
So this gives us a huge boost for those national security issues and being able to keep folks safe because it's all out there on the blockchain. But to do that, also, we got to get bad actors in line talking about tether and finance, and having regulation will do that. Right now, again, just so much uncertainty.
00:21:21
Speaker
getting meaningful legislation would provide those rules of the road that we are missing right now. And that is just so important. I think we, again, on the industry side and working with you and other members will continue, I think, to talk about that important role. Black team does provide that traceability, right? So if you're making a ransomware payment because you have to,
00:21:49
Speaker
then law enforcement, as you said, has a way to go back and track it. And in many respects, we've seen public declarations by the Department of Justice and the FBI that they've been able to do exactly that. So if we can rebalance that understanding and awareness, I think that would work well. And that goes to the broader point that we've talked about, that blockchain, for instance, can be used for a wide variety of use cases, far beyond just a financial instrument.
00:22:17
Speaker
And all the work that you're doing every day, particularly on Fit 21 and in your role in Congress is to try and bring that greater awareness overall. And so as we, I know we've taken a good portion of your time today and you have votes, you know, I'm going to ask you just to give us maybe your closing thoughts on, you know, what we can all do together, what you see as important and how we can continue to move the ball forward because you've done an amazing job. And for that, we thank you.
00:22:46
Speaker
Yeah, no. I think really the big issue is just education. Change doesn't happen in the halls of Congress. It happens when people make their voice heard to the people who you send to Washington.
Call for Bipartisan Advocacy
00:23:00
Speaker
So I think that's hugely important with this. And what I'm trying to do, and I encourage everybody who's listening to take to heart is make your feelings known.
00:23:12
Speaker
Explain why it's so important that this issue become a bipartisan issue, that Democrats and Republicans can agree on the strength of the digital dollar and the need to foster this new technology, to encourage innovation, to protect our consumers by passing legislation that'll give regulation to the industry. And the more folks can make their voice heard on that,
00:23:39
Speaker
It will allow us to continue to stay competitive with the rest of the world and ultimately save folks money because of this new technology. That's a big deal. And one of the reasons why I'm so passionate about it, because we can't bear a head in the sand here. We need to be active in regulating the industry.
00:24:03
Speaker
And I really, it would be a shame if this becomes a partisan issue. It shouldn't be. So I'm doing all I can to make sure my Democratic colleagues understand what the issue is about and why it's so important, because this is a big deal. And frankly, you know, in this Congress, we've gotten so little done. We're on track to be one of the least productive Congresses in our nation's history. But this is an issue where Republicans, you know, are working with folks like me in a very bipartisan way because they want to get it done.
00:24:30
Speaker
And they know that the only way they're going to get this bill over the finish line is they work together. So that's what that's what I came here to do. And on this issue, you know, we're able to work in a bipartisan way. And it gives me a lot of hope that.
00:24:45
Speaker
that on some of the bigger issues that we need to tackle as a country, we'll be able to do it. So, very helpful that we'll see a great vote in the House and continued progress on this bill and this issue in the future. Well, your passion and your enthusiasm and your
00:25:05
Speaker
really the foundational approach to bipartisanship is something that we are really are quite grateful for and should be commended. And I will say when I first came to Washington DC, that was the world that I grew up in. And the more I think that we can bring back to bear would be critically important. And as we've always said, when we see legislation, if everyone is slightly unhappy with it, then that probably means there was a compromise on some hard issues.
00:25:35
Speaker
But what I think is incredibly important is that you have always stayed focused on FIT21 and stablecoins on the things that you know matter the most, both for the United States and for consumers. And so as we wrap this up, thank you for all of your work and all of your service and for your time today. And we will look forward to seeing great successes with you in the future. Thank you.
00:26:02
Speaker
We hope you enjoyed our Hootenanny. Thank you for listening. For more Hootful and hype-free resources, visit www.owlexplanes.com. There, you will find articles, quizzes, practical explainers, suggested reading materials, and lots more. Also, follow us on Twitter and LinkedIn to continue wising up on blockchain and Web3. That's all for now on Owl Explains. Until next time!