WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – delivered the following opening statement at today’s hearing entitled ‘Examining Regulatory Frameworks for Digital Currencies and Blockchain.’
Sen. Brown’s remarks, as prepared for delivery, follow:
Thank you Chairman Crapo, and welcome to our witnesses.
At this committee’s hearing earlier this month, many of us of both parties voiced serious concerns about Facebook’s plan to run its own currency out of a Swiss bank account.
And by and large, we mostly heard deflections and dodging. It’s exactly what we mean when we say Facebook doesn’t understand accountability.
Facebook has proven over and over, through scandal after scandal, that it can’t be trusted.
But they don’t care.
They move fast and break things – things like our political discourse, journalism, relationships, privacy. Now they want to break our currency and payment systems, hiding behind the phrase “innovation.”
They want to “innovate” Americans right out of their hard-earned paychecks.
Look around at what happens with big corporations say they want to “innovate.”
Before they blew up the economy in 2008, bankers were pitching an “innovative” new product called subprime mortgages.
Just like Facebook – which claims its new currency will help the unbanked and underbanked – these mortgages were supposed to help people who never had access to credit achieve the American dream of homeownership.
In reality, those mortgages ripped off millions of families who ended up losing their homes, they wrecked the economy, and they made the staggering inequality in this country even worse.
The only innovative thing about the financial crisis was how the banks managed to stick everyone else with the bill – not exactly the kind of innovation we were hoping for.
So I am all for innovation – especially if that innovation delivers on its promises of improving people’s lives. But big tech companies and Wall Street banks are hiding behind innovation as an excuse to take over important public services that we all benefit from, and should all have a say in.
There are some things – like our currency, our payments system, and the protection of our savings accounts – that everyone in the country has a stake in. We should not be handing those kinds of public resources over to wealthy special interests, so they can squeeze more profits out of ordinary Americans.
Think about how hard it is to get quality service from Comcast, or about how much of your personal data was leaked by Equifax, or how your privacy was invaded by Facebook. And, we just learned in the last 24 hours, Capital One. Who’s next? We don’t know.
So we should be a little suspicious when someone tells us that only big corporations can be trusted to provide critical public services.
I recently moved into a new office – it was John Glenn’s office when he served Ohio in the Senate. I moved there because he and Annie are longtime friends. We’ve known each other for 30 years. John Glenn spoke at my Eagle Scout dinner in Mansfield, Ohio 50 years ago. But I moved into that office primarily because he was an innovator – he was the first American to orbit the Earth as part of the Mercury Project, which would be followed by the Gemini and Apollo Missions that would eventually put Americans on the moon. Many of us joined in the celebrations of the fiftieth anniversary of Apollo 11 just this month.
None of the astronauts did it alone – it took the hard work of thousands of innovating scientists and engineers, people like famed mathematician Katherine Johnson or immigrants like engineer Miguel Hernandez. These Americans didn’t do it for the profits. They did it to serve their country, and their successes were shared by every American who saw “U-S-A” emblazoned on the side of Apollo 11.
It’s a reminder that some infrastructure works better as a public good, and we shouldn’t let Big Banks or Big Tech get their hands on it.
The Federal Reserve and other watchdogs need to continue to be leaders in banking innovation.
And if we don’t move quickly to improve important infrastructure – not just roads and bridges, and highways and water sewer systems, but our payments systems, too. If we don’t move quickly to improve it, we’ll end up with big corporations that have broken our trust again and again and again, and frankly I don’t think that makes any sense.
I look forward to hearing from our witnesses today about which of these technologies might actually help regular Americans.
Thank you, Mr. Chairman.