In a rare occurrence, high profile bank CEOs testified before the United States House of Representatives Financial Services Committee on the past and future of the banking industry. The meeting held on April 10 is one of a kind and among other things discussed the sector performance since the financial crisis of 2008.
The discussions were centered on the banking sector but the lawmakers and CEOs also discussed the revolutionary blockchain and crypto. It is no secret that new technology has an impact on the banking industry.
During the question, session Rep Warren Davidson (R) highlighted the fact that the sector is headed towards an innovative era and blockchain is impacting positively on the banking systems and ushering in a new era in talking cybersecurity threats. He also noted that the uncertainty in the existing regulatory requirements is weighing the US down.
Backtracking on Crypto and Blockchain Capabilities
While addressing the chairman and CEO of JPMorgan Chase bank, Jamie Dimon, Davidson reminded the chairman that in 2017 termed crypto “not a real thing” only for the bank to introduce JPM coin into the market in February this year. However, Davidson went ahead to say; “we are supportive of cryptocurrencies as long as they are properly controlled and regulated”.
On his part, Dimon appears to be backtracking on his earlier perception towards blockchain and crypto by adding:
“The part that is not real is that cryptocurrency is not supported by anything, there is no value behind it other than what the next personal pay”.
While addressing Charles Scharf, the Bank of New York Mellon Chairman and CE, Davidson pointed out that the banks website blames lack of a clear regulation path on the provision of custodial cover on digital assets. On his part, Scharf replied:
“Cryptocurrencies are very early in their existence. They are not significant today to speak of in terms of being used as real currency o move value, and so we are actively thinking about what we want to do. One of the biggest issues that we have relates to any money laundering and KYC (Know Your Customer).”
Diversity of Topics Discussed
Away from blockchain and cryptocurrencies; other topics including the real estate crash, private prisons funding and policy diversity and equality. One representative, Alexander Ocasio-Cortez highlighted the fines banks levy on low salaries among female and minority employees.
During the discussion, the Token Taxonomy Act (TTA) was re-introduced. Once passed, the bill seeks to exclude crypto from being classified as security. In addition, the act seeks separate state initiatives from regulatory rulings made in the blockchain industry.