Pat Toomey Shows Excitement For ‘Terrific Applications That The Crypto Ecosystem Makes Possible’

has one last question as I do in little wrap thank you thanks Mr chairman um I think uh during the course of this hearing we we haven't talked as much as as we ought to about um some of the I think really exciting and terrific applications uh that uh the crypto ecosystem makes possible one of the categories that comes to mind is the ability to use stable coins in conjunction with smart contracts basically it turns uh into what I think of as programmable money where you can write into the code a payment that will occur based on some exogenous and verifiable event and the payment requires no human intervention it just happens when the exogenous event occurs so uh Michelle I want to first of all could you comment on whether you think there's um a lot of uh future in this idea of programmable money and then secondly I think you're familiar with the legislative framework that I've laid out for stable coins I think the heart of that is the requirement that we have 100 cash and cash equivalents as a backing for a stable coin and oversight by the OCC but not the fed and I wonder if you would comment also on whether you think that is the right approach to regulating stable coins of course um so I do believe that stable coins have a lot of promise not only in terms of the programmable money concept that you you state but also in terms of just being a faster and more stable way to work within a digital ecosystem rather than relying on kind of our current creaky payment rails um stable coins can offer a lot of Alternatives in that space where we have truly digital money I am familiar with your legislation and I think that IT addresses what is one of the I think most obvious risks in the stablecoin space which is the concern that stablecoin issuers do not have stable coins because the reserves that they have behind them might not be what they say they are um I think that there are a number of ways that you can go about creating a regulatory regime to take account of that risk I myself would proposed kind of a a disclosure-based framework that could be put into place by something like the SEC in fact it's very similar to the disclosure framework that you have proposed with the OCC I do think it's important to separate that type of regulatory function from the federal monetary regulator so that the Federal Reserve is not the one charged with handling regulation of kind of a money substitute here there's a lot of conflicts of interest that can exist in that space and I think it's wise to keep stable corn regulation which is something that I think is kind of low-hanging fruit at this point there's obvious risks and I think there are pretty obvious ways to deal with those risks in pretty simple fashion but we should keep that type of Regulation separate and apart from monetary regulation thank you thank you