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House Hearing on Proposed Cryptocurrency Premature, Focus Should Be on Regulatory Barriers to Innovation

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Ahead of a House Financial Services Committee hearing focused on Libra, a new cryptocurrency proposed by Facebook and other entities, Competitive Enterprise Institute experts John Berlau and Patrick Hedger argued oversight was premature for a concept that is not yet available for consumers.

CEI senior fellow John Berlau said:

“Instead of grilling Mark Zuckerberg, about what is – at this point – simply one more proposed entry into the cryptocurrency market, Congress should look at the walls that politicians and regulators have built that keep competition from innovative firms out of the financial sector. Although the technology envisioned by Facebook and other backers of the Libra currency is new, U.S. policymakers have a long history of telling innovative firms to ‘keep out’ of finance. These restrictions have demonstrably harmed American consumers, savers, and entrepreneurs.”

CEI research analyst Patrick Hedger said:

“If the role of government oversight is to address the rare ‘market failure,’ one has to question the point of a Congressional hearing on Libra—a product that has yet to hit the market. It seems clear that having Mark Zuckerberg testify before the House Financial Services Committee serves the political ambitions of members of Congress over protecting consumers.

“This ‘Mother may I?’ approach to new technology deters investment and innovation and infantilizes consumers. The people will vote with their wallets on Libra. It would be a shame if political posturing denies them that opportunity and all the possible benefits of the service.”

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