It’s a beautiful sunny day in Dallas. Delegates, speakers, and sponsors are welcomed to the George W. Bush Presidential Center where the North American Blockchain Summit started at 9.30am local time.
The main stage of the Summit is based in the auditorium of the Center. Earlina Green Hamilton is the lady who leads the stage during this year’s Summit. As was the custom at previous editions of the summit, Lee Bratcher, President of the Texas Blockchain Council and the main organizer of the Summit welcomed attendees, followed by the U.S. national anthem.
At the time of last year’s Summit, the price of bitcoin was hovering at around $36,000. At this year’s event, Lee pointed out how the price of bitcoin is now at record highs of $94,000. Bearing in mind what a prominent role cryptocurrencies have played in the recent presidential election, it was no surprise that the first two fireside chats focused on topics related to crypto.
Former Republican Senator Toomey Shares his Insights at the Summit
Former Senator Pat Toomey (R) represented the key state of Pennsylvania for 12 years in the Senate. He retired from the Senate at the end of 2022. He was joined on stage by Brian Morgenstern, Head of Public Policy for Riot Platforms. Our readers may recall earlier in 2024 how Riot Platforms sued the U.S. Department of Energy. Policy was much of the focus of the discussion.
The Former Senator started by expressing how he feels about technology. How he hopes for a well-defined regulatory environment. And how he thinks we will see tokenization of ordinary securities, bank deposits and all sorts of things with the help of blockchain. He also mentioned stable coins several times during the conversation.
“I think stable coins would significantly enhance the status of the dollar as the world’s reserve currency and the leading medium of exchange for a couple of reasons,” Pat explained.
He highlighted how the dollar should be able to benefit from the best technology in the world. Something that cash simply cannot do. The other thing Pat noted was how stable coins can be pivotal in creating a whole new category of demand for treasury securities.
Should Things Change at the Fed?
Former Senator Toomey has strong opinions on the Federal Reserve. A few years ago he was outspoken in his opinions about Fed Chairman Jerome Powell.
Pat believes it was a bad idea to maintain zero nominal interest rates for so long. Especially as the money supply was being increased at the same time. He mentioned how he had frequently spoken to governors at the Fed about this. He always thought it would lead to high inflation. And it did. Even though the Fed constantly reiterated how ‘inflation expectations are well contained’.
Another thing that Pat explained is how he believes money can be considered a commodity. He explained how if there’s too much of this commodity – money – then it’s value will go down whilst other commodities will go up. The Fed monetized the massive amount of debt issued by the government because the government was spending too much. This eventually led to a new paradigm where inflation now has a target of 2%. For many years 2% was the maximum that inflation should be. Today this is now the average. This raises further questions. How long will this new inflationary period last for?
Another point that Pat made was how he believes that the Fed should look at the Taylor Rule introduced by John Taylor in a 1993 paper. Put simply, the Taylor Rule says that the Fed should raise the interest rate when inflation increases and lower the interest rate when GDP declines. Seems logical. Except for those preparing the forecast models at the Fed.
On the topic of the Fed and central banks, Pat was keen to point out how central banks are often hostile to ‘private money’. This could mean that the idea of stablecoins is also something that could be considered private money. Meaning that there is much more work to be done with the Fed on this topic.
What about Bitcoin?
The talk turned to bitcoin next. It was interesting to hear how Pat sees a role for bitcoin as a strategic reserve. But not on its own, but as a basket of various commodities. Much like the way that institutional investors only use a small percentage of digital assets in a portfolio now. Pat believes that bitcoin shares a lot of attributes with gold.
Another thing that the Former Senator shared was how the digital assets ecosystem played a key role in the recent presidential election. ‘Stand with Crypto’ was one of the grassroots efforts he pointed to. There may have been an awareness of all things crypto in the Congress in the past. However, today this has changed, and we are now talking about ‘hyper awareness’, Pat believes.
With a rise of pro-crypto representatives in the Congress, Pat believes that legislation is going to follow. He hopes this will be the type of legislation that we’ve been waiting for. He is optimistic about a stablecoin bill and a market structure bill. If this took place, Pat shared how he can see a huge wave of adoption coming. A lot has been held back because of the hostility of the previous administration. This can now change.
Former Speaker of the U.S. House of Representatives Paul Ryan Shares his Insights at the Summit
It was a hard conversation to follow, but Paul Ryan, former speaker of the U.S. House of Representatives was a dynamic speaker to follow from the former Senator. Paul was speaker of the house from 2015 to 2019 and had been the youngest speaker in nearly 150 years. He is used to a challenge.
Joining him on stage was Faryar Shirzad, Chief Policy Officer at Coinbase, who was keen to learn where Paul stood on many of the key issues today.
Paul started the conversation by mentioning how he monitors the dollar and U.S. debt very closely. In the past he chaired the Budget Committee for eight years. He takes a keen interest in economics. Importantly, Paul shares the Former Senator’s enthusiasm for stablecoins.
Paul explained how he has been advocating for stable coin legislation for some time now. There are a lot of reasons for this, he shared. One of them is that they will create new demand for U.S. treasuries. He feels that there may be more cause for concern with U.S. debt and that it would be useful to have stablecoins as a means of creating fresh demand for treasuries. This would both mitigate any future recessions whilst being a ‘soft power tool’ to use.
The Challenge to the Dollar
Recent discussions amongst BRICS members looking to settle trades without the use of the U.S. dollar or the SWIFT payments network has reinforced the need to act.
“The dollar is being challenged,” Paul shared. “And that matters a great deal. Not just to America, but to freedom loving people around the world.”
Faryar pointed out how 98% of stablecoins are dollar denominated. He pointed out how the entire crypto economy is largely dollar denominated.
Paul replied by sharing how Hayek had written about stablecoins back in the 1950s. He specifically stated stablecoins, as CBDCs don’t seem to be a popular concept at this years’ Summit. In fact they have negative connotations for many Americans who have legitimate concerns about how CBDCs could be used. According to Hayek, instead of a national government issuing a specific currency, use of which is imposed on all members of its economy by force in the form of legal tender laws. Private businesses should be allowed to issue their own forms of money. Something that sounds very similar to the concept of stablecoins, Paul explained.
If the U.S. can get stablecoin legislation right, the dollar can continue to fulfil its role as a global reserve currency. Not to mention be a leader in Web3. Something Paul is also keen to see.
The event is only just getting into its rhythm. We hope to share further updates with you as the Summit evolves.
Author: Andy Samu
