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In this episode of Bracewell Crypto Bits, host Anne Termine and Brittney Justice discuss some key takeaways on stablecoins and central bank digital currencies, or CBDCs, from the Consensus 2022 conference held in Austin, Texas, June 9-12. Consensus 2022 is a festival-style event that showcases and celebrates all that crypto has to offer.
When this conference first started, there was a maximum of 500 people. How many people attended this year?
Around 17,000 attendees, so just a massive amount of people. I think that goes to show how quickly the industry's growing and how excited people are to either learn about it or discuss it with other people who are involved in the industry. There were some really big names who attended the conference too: Senators Toomey, Gillibrand, Lummis, Edward Snowden, Samuel Bankman-Fried, 2 Chainz.
One of the panels was Washington's crypto awakening, which had Senator Kirsten Gillibrand and Senator Cynthia Lummis, who recently produced a bill that is a comprehensive regulatory framework for the crypto industry. In addition, you had Senator Pat Toomey and representative Patrick McHenry. Both sides of the house, both sides of the aisle, talking about where does the Hill, where does legislation fit over this space? Was stablecoin the first thing that they were covering in that panel?
Stablecoin was one of the only things they really talked about during their panel. They hit the ground running the second they came on stage and the mics were hot. I think everyone was kind of losing their minds because, they literally sat down, representative McHenry specifically, and the first thing he said is, "There will be stablecoin legislation passed by the end of this year."
The fact that representative McHenry sat down and said, "There will be stablecoin legislation," is not necessarily 100 percent surprising, but with the force with what you're saying he brought it is. Did you get a sense that they could actually get to some level of agreement on the issue?
There was this general theme that they all kept repeating over and over again, that they were all in consensus around the importance and the urgency of passing some type of stablecoin legislation. They also kept mentioning that everyone on the Hill kind of agrees on a lot of the main aspects of what needs to be in any stablecoin legislation, but that anything that is critical and left out of stablecoin legislation is not because of any disagreement on the Hill necessarily, or any issues with the Republicans and Democrats necessarily disagreeing with each other.
Did they address what their definition of stablecoin would be? As we've discussed on prior podcasts, and you and I have discussed at length, once you start putting definitions to the terminology in the space, you run the potential of automatically narrowing it, and thereby stifling innovation. Did they give a sense of where they would end up with the definition of stablecoin?
They didn't, but Representative McHenry, one of the first things that he did say was that the most important part of this legislation will be how they define stablecoin, and that if they can't get that right, it's almost better if Congress doesn't move on this, rather than make a mistake and define stablecoin too narrowly, too broadly.
Did they discuss any of the products like central bank digital currencies?
Central Bank Digital Currencies, CBDCs were brought up very briefly at the end. Representative McHenry very quickly shot down the idea of a CBDC. He said, "It's not going to happen. The Fed has no power to regulate individual transactions." That was his going away comment. He was the only one who did make a comment on CBDCs, but throughout other panels at the conference, it did not seem like a popular concept. I wasn't necessarily expecting that. On another panel, one of the heads of Circle Internet Financial, which is a payment technology company, called the idea of a CBDC preposterous. He used that word. There was a lot of hate on CBDCs, surprisingly.
Any other high-level takeaways from the conference for you?
It was so interesting to meet so many really cool people. People who were brand new to the crypto industry, to people who've been there for the past 15 years, since the very beginning of Bitcoin. I think one of the big takeaways for me was how quickly this industry is growing from people who are in this professionally to people who are just interested in it.
Another thing that I thought was really great was to see the diverse group of people who were there, and I think that really goes to a lot of the benefits of crypto, which is it is good for minority communities. It is good for people who traditionally haven't been involved in the financial sector, and you saw people from all different walks of life here wanting to learn, wanting to get involved in the area. While the crypto industry and the markets aren't doing well right now, I don't think it's going away anytime soon and that's something I walked away reflecting upon.
Have questions about the issues facing the about stabelcoins, CBDCs or developments in the cryptocurrency and blockchain communities? Email Anne Termine.
The opinions expressed in this podcast are those of the speakers and do not necessarily reflect the viewpoint of their institutions or clients.