Bitcoin has an enormous long-term value, believes US Congressman Patrick McHenry.
The North Carolina representative said decentralized cryptocurrencies like bitcoin are “very real, very important projects” that are still in the early stage of innovation. He noted that bitcoin’s real use case remains outside the grasp of financial industry, saying that nobody can predict which way the cryptocurrency would go in the next 20 years.
“Nevertheless, it would be of enormous value and utility,” asserted Congressman McHenry.
Congressman Patrick McHenry reintroduces the Financial Services Innovation Act to create entrepreneurial regulatory sandboxes. He describes how it would affect ICOs and the BitLicense. Plus, we discuss what could best compete against a Chinese digital yuan https://t.co/hK6pc7n2gu
— Laura Shin (@laurashin) October 22, 2019
Bitcoin against Digital Yuan
The statements came during a podcast show hosted by Laura Shin, wherein the journalist asked McHenry about how the United States would compete with China’s digital yuan. The country, which continues to be a hotbed for the world’s leading cryptocurrency and blockchain startups, falls short when it comes to providing an innovative regulatory sandbox.
Michael Arrington, the founder of TechCrunch who manages a dedicated crypto fund, said last year that the US’s strict regulatory and visa regime is sending talents out to tech-havens like Singapore, Switzerland, and Israel.
Facebook’s Libra, the US’s leading high-profile global payment project also rammed into a dead wall after the US regulators and politicians snubbed it at a Capitol Hill hearing. On the other hand, China accelerated its plans for a similar, but state-controlled blockchain project that would digitize yuan. In her questions to Congressman McHenry, Shin quoted RBC analysts Mark Mahaney and Zachary Schwartzman stating that digital yuan would become a de facto global digital currency “if the US regulators ultimately dismiss Libra” and decide not to draft a cryptocurrency regulation draft.
Congressman McHenry ignored the prospects of a Libra or a Bitcoin to compete with digital yuan. The politician praised Libra for putting cryptocurrencies in the conscious of many people around the world. But he denied the possibility of the US ever projecting a corporate-backed digital currency to compete with central bank digital currencies like Digital Yuan. Bitcoin, too, appeared like a no-choice to Congressman McHenry despite being a promising technology for the job.
“A digitized US dollar is a reasonable next step from our central banks,” he said, adding later:
Congressman McHenry did not entirely reject Libra and Bitcoin for their potential role in advancing digital finance. The representative said the US could make use of technology giants and decentralized payments solutions to compete with Chinese companies like AliPay.
“We are looking into whether or not the Federal Reserve has the legal capacity currently to issue digital currencies. If they do not have a legal authority, I would support the legislation so that the Federal Reserve have that capacity,” he added.