Congressman takes aim at peers who think crypto could cause a ‘financial 9/11’

Characterizing his contemporaries as viewing the crypto sector as a “financial 9/11,” Congressman Ted Budd has warned lawmakers against driving blockchain innovation offshore.

Representative Ted Budd of North Carolina, a member of the House Financial Services Committee and Congressional Blockchain Caucus, has urged lawmakers to embrace decentralized innovation.

In what appears to be the first occasion in which a publicly elected official has met with a decentralized autonomous organization (DAO), Budd acknowledged the increasing concern about crypto among lawmakers while speaking to MakerDAO’s Chris Cameron on July 29.

“There are some on the Senate side and some on the House side which fear, especially when it comes to currency, the blockchain, decentralized finance and how it’s going to evolve,” he said.

“The fear is whether it will hurt our national sovereignty? Will it destabilize the dollar? Is it a threat to national security?” he added.

“You even have some in the House that sit not too far from me on the House Financial Services Committee that would call blockchain basically a financial 9/11.”

Budd characterized his peers’ concerns as short-sighted, warning that rivals of the United States could benefit if local lawmakers take a hostile and exclusionary stance regarding digital assets.

“I think we need to be very open to this. We need to make the US the place where this technology flourishes,” he said.

“It’s a new technology that’s going to evolve and I’d rather evolve here in the U.S. than in Singapore or in Estonia, or other nations that could be hostile to the U.S. […] I’d rather it be on our shores.”

Responding to a question from Cameron asking how a decentralized entity can better engage lawmakers, Budd acknowledged that many decentralized projects “don’t know who to call” to reach out to regulators. 

“There’s a lot of innovation but there’s also maybe not coordination when it comes to government affairs,” he noted.

Budd urged DAOs to reach out and schedule meetings with lawmakers, but warned: “I would come and not do tech speak to these folks.”

“If you can explain it really clearly, ask how they think about these things. Propose the questions ahead of time, we are pretty accessible.”

Related: Western nations need better public-private cooperation on crypto, says Mohamed El-Erian

The conversation came as stablecoins face increasing scrutiny from lawmakers, with U.S. Treasury Secretary Janet Yellen calling for greater regulatory oversight of the stable token sector during a July 19 meeting of the President’s Working Group on Financial Markets.

On July 27, Acting Comptroller of the Currency, Michael Hsu, announced ongoing investigations scrutinizing the purported commercial paper reserves of the largest stablecoin by market cap, Tether (USDT).