- Sam Bankman-Fried, the CEO of the FTX exchange told US lawmakers that more clarity was still needed from US regulators.
- Bankman-Fried said that crypto had the potential “to improve a lot of people’s lives”.
- Cryptocurrencies have been seen as a better alternative for the unbanked and for sending money abroad.
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FTX boss Sam Bankman-Fried believes the crypto industry could improve people’s lives — it just needs clearer guidance from regulators to make it happen.
The crypto exchange CEO laid out what he sees as the benefits of digital currencies before US lawmakers on Wednesday.
“The industry has the potential to improve a lot of people’s lives. There are a lot of ways that this can happen. I think that the payments side of this gets a lot of attention, and rightfully so,” he told members of the House Financial Services Committee.
Bankman-Fried noted that people making cross-border payments to family members can face double-digit percentage fees, and that global remittances can take weeks to arrive. It’s a particular problem for the hardest-off, who don’t have the same access to financial services as they stand, he argued.
“When you look at the number of people who are underbanked, or unbanked, in the United States and globally — it’s indicative of a system that does not work for everyone,” Bankman-Fried told the lawmakers.
“Cryptocurrencies do provide a potential way to address a number of these issues, making it easier, cheaper, faster and more equitable for people to do what they need to do to manage their financial lives.”
Digital and crypto transfers can be carried out without going through the traditional financial system, though people do need a computing device. El Salvador, where Statista found 71% of people don’t have a bank account, made bitcoin legal tender in September. In the US, 5% of people were unbanked as of 2019, according to an FDIC survey.
Asked how to keep crypto industry innovation happening in the US, Bankman-Fried called for clearer rules of the road from regulators.
“I’m optimistic that on the regulatory side, we’re not that far from that point. I think that there are a few clarifications that could go a very long way here,” he said.
“On the market side — having a framework with a single regulatory structure, and it might have multiple regulators involved in it.”
He said a single unified framework for spot and future digital assets would help, likely involving oversight by both the Commodity Futures Trading Commission and the Securities and Exchange Commision.
The SEC has yet to give the go-ahead for an exchange-traded fund backed by bitcoin, rather than bitcoin futures. It has come under fire for rejecting a spot bitcoin ETF from VanEck. Meanwhile, other countries are forging ahead, and Canada recently approved Fidelity’s spot bitcoin ETF.
Lawmakers should also look at the need for more clarity in the audit requirements for stablecoin reserves, the FTX boss said. Stablecoins are a type of cryptocurrency that’s pegged to an asset such as a fiat currency, government bonds, or a precious metal.
“Giving clarity on the stablecoin side of audit requirements for the reserves — but without sort of squashing innovation by requiring only a very limited number of institutions to be able to issue them — could go a long way.”
Digital payments company Circle, whose CEO also testified before the House committee, has been criticized over shifting the reserves for its USDC coin beyond just the dollar and short-duration US Treasuries.
US policymakers are expected to put forward a package of cryptocurrency measures next year.
“I’m optimistic that we’re going to see changes to the framework over the next few years that will bring us into a world that can make the United States the source of the deepest and most liquid markets in the cryptocurrency ecosystem,” Bankman-Fried said.