US Senator: 'I Don't Think You've Persuaded Anyone' Crypto Creates Financial Inclusion

Publicado en by Coindesk | Publicado en

Blockchains are all and well and good, but they won't be enough to bring financial services to the underbanked and unbanked.

At least, that was the drift of a U.S. Senate hearing Tuesday on cryptocurrency regulation, where lawmakers and witnesses scrutinized the oft-repeated claim that the technology will spur financial inclusion.

During the Senate Banking Committee hearing, Sen. Brian Schatz questioned Jeremy Allaire, CEO of crypto exchange Circle Internet Financial, on the matter.

"I don't doubt the potential for this tech, I just don't think it's going to bank low income communities and I don't think you've persuaded anyone here that it's going to do that."

Allaire agreed that the problem of financial inclusion is complex.

"These are human issues and real policy issues and the risks we have to address in the financial system those exist significantly. This technology actually does provide an avenue to improve upon those but there's no silver bullet here," he said.

Another witness on the panel, University of California law professor Mehrsa Baradaran noted that roughly a quarter of the entire U.S. population does not have access to the nation's financial system, and spend "Billions" paying alternative service providers to quickly access cash.

"The problems of low-income and underbanked customers is not that they're unsatisfied by existing tech, the problem is they live in a banking desert there is no place to [use a card] because banks are no longer interested in serving those customers," she said.

"I don't doubt the importance of the technology or that we'll probably all be using it in two decades but I think that's a different assertion than 'oh, by the way, it's going to solve all these societal ills,'" Schatz said.

"The important thing here is to understand what this tech does and what it doesn't do, because if we're going to establish a regulatory framework for this we need to not be so triumphant about all the problems that it's going to solve but we also need to be clear-eyed about the problems it may create but also the potential for it."

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