Witnesses listen as Chairman Latta gavels in the hearing.
Another discussion present throughout today’s hearing was in regard to the challenges faced by those within the industry. One of which is the barrier to entry for someone looking to capitalize on FinTech in order to create new opportunities. Peter Van Valkenburgh, Research Director at the Coin Center,elaborated on this, stating, “ [t]he state-by-state approach to money transmission licensing…jeopardizes not only permissionless innovation but also responsible innovation.”
Providing an example, he relayed, “A young innovator dreaming of building the financial infrastructure of the future would be well-advised to leave the U.S. Not because she should try and avoid justifiable consumer protections, or do it on the cheap in a foreign state that will look the other way, but—instead—because simply determining what the U.S. regulatory landscape demands from her is a herculean undertaking.”
Jeanne Hogarth, Vice President at Center for Financial Services Innovation noted some of the challenges because of how rapidly the FinTech industry evolves. “The rate of change in both technology and the services and products these technologies enable make “bright line” legislating and rulemaking an anachronism. Consumer protection is still very much needed, but policy makers need to identify the right tools to reshape the regulation of financial services to fit the innovations in the 21st century…”
For more information on today’s hearing, including a background memo, witness testimony, and archived webcast, click HERE.
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