Maxine Waters

Ms. WATERS

Ms. WATERS. Mr. Chair, I reserve the balance of my time.

Ms. WATERS. Mr. Chair, I yield myself such time as I may consume. Mr. Chair, I am struck by the way Republicans have so quickly changed their tune on how we should be promoting innovation. Here are just a couple of quotes from Republicans from the debate just yesterday. Representative Davidson: ``For too long, we have pushed innovation and investment in digital asset projects overseas. . . . We finally have the chance to end this trend and solidify ourselves as the leaders in this industry.'' Mr. McHenry: ``We are falling behind Europe. This bill catches us up so that we do not lose out on innovation policy to the Europeans, to the folks in the U.K., to Singapore, to Japan, to Hong Kong, that all have regimes similar to what we are doing in this bill. . . . The next generation of internet technology is being written. It should be written by American innovators here in the United States. We can allow that innovation to pass us by, or we can seize the opportunity.'' The double standard is simply stunning. Mr. Chair, I reserve the balance of my time.

Ms. WATERS. Mr. Chair, I yield myself such time as I may consume. Mr. Chair, if privacy is the main concern motivating the supporters of this bill, then it is wholly unclear why the bill would ban wholesale CBDCs, which do not pose privacy concerns because they would not be used by consumers at all. They would be used by banks and other institutions to reduce transaction costs and improve payment speed in cross-border transactions with other institutions. For these reasons, it was the American Bankers Association that advocated for the exclusion of wholesale CBDCs from this bill when it was marked up by our committee. Supporters of this bill can't explain to the American people why a prohibition on a wholesale CBDC would protect their privacy so they resort to baseless fearmongering. Mr. Chair, I yield 30 seconds to the gentleman from California (Mr. Sherman).

Ms. WATERS. Mr. Chair, I reserve the balance of my time.

Ms. WATERS. Mr. Chair, according to an analysis written by Jaret Seiberg with TD Cowen, published today, May 23, 2024: We do see risk in the House looking today to pass a related bill that would ban the United States from launching a digital dollar. We view such a ban as negative for the global dominance of U.S. banks and for the global role of the U.S. dollar. This is because the ban would apply to wholesale, as well as consumer use. That could give the euro or other currencies that are digitized an edge in being used for global trade as stablecoin digital dollars could lose value if there is a redemption run, while a digital euro would not face that threat. Mr. Chair, I reserve the balance of my time.

Ms. WATERS. Mr. Chair, I yield myself the balance of my time to close. Mr. Chair, yesterday, we debated a Republican bill that would substantially deregulate the crypto industry, allowing most crypto to operate without a primary regulator and with virtually no regulation. Where was the concern about a consumer's privacy then? Just yesterday, Republicans threw all of the existing protections for consumers, including privacy, out the window in the name of so-called crypto innovation and U.S. competitiveness. When it comes to the one crypto innovation that could impact our national security interests and economy, my colleagues want to stop that innovation in its tracks. There is simply no reason to unilaterally tie our own hands in this respect and risk undermining the primacy of the U.S. dollar in the process, and it would be harmful to every American to make it harder for the Federal Reserve to combat inflation. The stakes with this bill are incredibly high. The strength of the United States dollar, our ability to innovate and compete globally, our ability to impose sanctions and protect our interests abroad, and our ability to stop inflation are all well on the line. Mr. Chair, I certainly urge a ``no'' vote on this bill, H.R. 5403, and I yield back the balance of my time.

Ms. WATERS. Mr. Chair, I claim the time in opposition.

Ms. WATERS. Mr. Chairman, this bill is opposed by the following organizations: Americans for Financial Reform, Demand Progress, Public Citizen, and Take on Wall Street. Mr. Chair, I reserve the balance of my time.

Ms. WATERS. Mr. Chair, I oppose this amendment, which doubles down on the Republican efforts to prohibit CBDCs, which, if Republicans read their own bill, is already prohibited in the bill. This sense of Congress only causes further confusion on how the bill should be interpreted as a whole by duplicating things that are already in the bill by wording them in a slightly different manner. Experts from Atlantic Council have warned that: ``If this bill ever became law, the United States would be the only country in the world to have banned CBDCs. It would be a self-defeating move in the race for the future of money. It would undercut the national security role of the dollar as the decision would only accelerate other countries' development of alternative payment systems that look to bypass the dollar in cross-border transactions. This would make U.S. sanctions less effective.'' Mr. Chairman, I urge Members to oppose this amendment, and I reserve the balance of my time.

Ms. WATERS. Mr. Chairman, Republicans are focused on the bill's prohibition on CBDCs, but according to the nonpartisan CBO: ``The bill's prohibition on the Federal Reserve's use or issuance of a central bank digital currency could apply to bank reserves, which are a unit of value and a liability of the Federal Reserve.'' As the CBO also acknowledges, bank reserves are a primary tool for the Fed in conducting monetary policy. Prohibiting the Fed from holding bank reserves could very well take us backward, erasing all progress that the Fed has made so far in reducing inflation and achieving a soft landing. A vote for this bill is a vote for higher inflation and economic uncertainty. Mr. Chairman, I reserve the balance of my time.

Ms. WATERS. Mr. Chair, in closing, I urge my colleagues to oppose this amendment and the underlying bill, and I yield back the balance of my time.

Ms. WATERS. Mr. Chair, I demand a recorded vote.

Ms. WATERS. Mr. Chair, I claim the time in opposition to the amendment.

Ms. WATERS. Mr. Chair, I urge Members to oppose the Mooney amendment, which explicitly bans CBDC pilot programs. Like the last amendment we just considered, this amendment bans something that H.R. 5403 already bans. Oddly, this amendment would exacerbate the confusing drafting in H.R. 5403, by prohibiting something in two places but in slightly different ways. In fact, all three of these amendments that we are considering for this bill overlap with existing provisions in the underlying bill, which leads me to believe that Republicans simply don't understand what their own bill does. Let me again try to explain their own bill. This amendment and the bill both prohibit the Fed from conducting a study on how to design a central bank digital currency using a pilot program. In case the public is wondering, the New York Fed is currently conducting a pilot through its New York Innovation Center to test the benefits and drawbacks of a wholesale CBDC in collaboration with U.S. banks and the Monetary Authority of Singapore. This pilot does not mean that at the end the Fed will issue a CBDC or that Americans will have one. In fact, the Fed has made it abundantly clear that it wants Congress to authorize it to do so, but how is Congress going to be able to make this decision if we don't have any research as to how a CBDC could be designed that reflects our values? Again, importantly, to counter misinformation from the other side of the aisle, wholesale CBDCs are not used by individual consumers. They are only used by institutions to transfer funds, so there are no consumer privacy issues with wholesale CBDCs because consumers are not directly involved. If the point of this bill is to protect consumer privacy, the sponsor should have directed the Fed to ensure that it only tests a CBDC that does that. Mr. Chair, I urge Members to oppose this harmful amendment and H.R. 5403, and I reserve the balance of my time.

Ms. WATERS. Mr. Chair, it seems that Republicans remain focused on CBDCs when, as I have explained, the CBO has pointed out that the definition of CBDC in this bill can be interpreted to include bank reserves held by the Fed. Bank reserves are used as the settlement funds for interbank transactions that are facilitated by the Fed via its payment systems. This means that prohibiting the Fed's ability to hold bank reserves would make it difficult, if not impossible, to administer these payment systems likely causing a massive disruption to our banking and payment systems. A vote for this bill is a vote to disrupt our banking systems. Republicans are refusing to acknowledge the broader impacts of this bill to undermine the Fed, disrupt our banking and payment systems, and risk higher inflation, but the American people should know the truth. Mr. Chair, I reserve the balance of my time.

Ms. WATERS. Mr. Chair, like the underlying bill, this amendment closes off opportunities for innovation and harming our influence around the world before we have even had a chance to fully study, test, and understand CBDCs. This bill and amendment represent the wing of the Republican Party that is anti-science and, ironically, scared of the innovation they claim to like. Again, this amendment does not prohibit the issuance of a CBDC; it is prohibiting the research on how CBDCs work. I can't stress how irresponsible it is for Congress to be passing blanket prohibitions on research based on unwarranted views. I can understand fears about potential outcomes, but I cannot understand fear of research. Mr. Chair, I urge my colleagues to vote ``no'' on this amendment and H.R. 5403, and I yield back the balance of my time.

Ms. WATERS. Mr. Chair, I demand a recorded vote.

Ms. WATERS. Mr. Chair, I claim the time in opposition to the amendment.

Ms. WATERS. Mr. Chair, with this amendment, my Republican colleagues are really piling on to ensure the Fed is prohibited from even thinking about CBDCs. Yet again, this amendment is not adding anything substantive that isn't already in the bill. Instead, it is making worse the internal drafting inconsistencies in H.R. 5403. Mr. Chair, I urge Members to oppose this amendment and the underlying bill, and I reserve the balance of my time.

Ms. WATERS. Mr. Chair, I reserve the balance of my time.

Ms. WATERS. Mr. Chair, this amendment, like the underlying bill, is dangerous and rash. It would prohibit the U.S. from even training for a race that has already begun. Mr. Chair, I urge my colleagues not to cave to baseless fear- mongering. I have already explained in depth how the privacy concerns from Republicans do not align with the actual facts. I simply urge my colleagues to vote ``no'' on this amendment and the underlying bill, and I yield back the balance of my time.

Ms. WATERS. Mr. Chair, I demand a recorded vote.

Ms. WATERS

Ms. WATERS. Mr. Speaker, I demand a recorded vote.

Ms. WATERS

Ms. WATERS. Mr. Chair, I claim the time in opposition to the amendment, but I am not opposed to it.

Ms. WATERS. Mr. Chair, I yield myself such time as I may consume. Mr. Chair, I rise in strong opposition to H.R. 4763, which I am calling the not fit for purpose act. This bill would deregulate a substantial portion of the crypto industry, taking them out of the purview of the Securities and Exchange Commission, or SEC. It would allow them to operate either under a lighter touch regulatory regime under the Commodity Futures Trading Commission or in what I have called a regulatory no-man's-land, with no primary regulator and virtually no regulations. For crypto that would remain under the SEC's purview, this bill still provides major exemptions from critical securities laws. If this wasn't bad enough, this bill is not just about crypto. Language was added to the bill after it was marked up by the committees of jurisdiction that would allow even some traditional securities to also exist in this regulatory no-man's-land. Specifically, I am referring to title II of the bill that defines the term ``investment contract asset.'' Assets that fall under this definition are explicitly deemed not to be securities and, therefore, not under the SEC's purview, but the bill doesn't provide an alternative legal framework for these assets. This represents an extreme MAGA, libertarian approach where companies can operate without regulatory scrutiny, and consumers and investors are on their own in detecting and avoiding fraudulent schemes. While Republican defenders of this bill have argued that this definition of investment contract asset is limited to digital assets under the bill, this is disputed by legal experts and SEC Chair Gary Gensler himself, who confirmed in a recent statement regarding this bill that it would have a broader impact on traditional securities. Interestingly, I didn't hear any arguments from the Republicans at the Rules Committee hearing disputing that this would, in fact, be a regulatory no-man's-land, even if they insist it is just for crypto. Even for crypto that would be transferred over to the CFTC, I have serious concerns about the loss of protections for consumers and investors. The CFTC is generally designed to deal with sophisticated institutional investors and traders. It doesn't have the same kind of protections that the SEC has for retail investors and consumers. Under all three avenues provided for crypto under this bill: The CFTC's lighter touch regulatory regime, SEC's weaker regulatory regime for restricted digital assets, or the regulatory no-man's-land, these are just a few examples of protections that would be stripped away: the right of an investor to sue, gone; protections against conflicts of interest, gone; the right to critical disclosures that help investors make informed choices, gone; and enforcement by States against fraud; and enforcement by the SEC for all of the above protections, including antifraud. H.R. 4763 would also upend more than 170 enforcement cases the SEC has brought related to crypto violations. These actions have been brought by both Democratic and Republican administrations to protect investors against crypto bad actors. The SEC is the Federal agency on the front lines of enforcing our existing securities laws on crypto firms that have willfully chosen to ignore the law and defrauded consumers out of billions of dollars with these get-rich-quick schemes. Giving this industry a free pass to avoid most all regulations cannot be the answer to the serious concerns that Members have raised about crypto fraud. I have seen many efforts by Republicans, acting at the behest of the industry to pass deregulatory regulation, but this is perhaps the worst, most harmful proposal I have seen in a long time. This bill would deregulate crypto and certain traditional securities to the extent that I and other experts have expressed serious concerns about this bill causing a potential market crash and recession. I am also reminded of how, over the warnings of regulators, Congress moved to deregulate the over-the-counter derivatives. Remember the derivatives market back in 2000? The resulting financial crisis triggered the implosion of financial institutions, a wave of foreclosures, and trillions of dollars in lost wealth. Mr. Chair, I urge my colleagues not to forget. They should not repeat history with this bill. The Biden administration has released a Statement of Administration Policy opposing this bill. The bill is also opposed by a long list of investors and consumer advocates, State securities administrators concerned about State preemption, labor organizations worried about the retirement funds of their members, environmental groups concerned about the undisclosed risk of crypto mining, civic organizations worried about the undue influence of the financial and crypto industry over Congress' actions, academics, legal experts, and technologists. Mr. Chair, I urge my colleagues to stand up and to not be afraid of Big Crypto, to stand up for everyday investors and consumers. Mr. Chair, I urge my colleagues to vote ``no'' on this bill, and I reserve the balance of my time.