On CNBC’s Squawk Box, Republican Senator Mike Rounds spoke about the state of digital payments in the United States. He proposed that the lack of information in the cryptocurrency space is driving mistrust in the community, and that new regulations should be developed to support new innovation. He added,
“I think most members of the Senate, once they’ve had an opportunity to learn what cryptocurrency is all about, at that point they’ll ask questions. There’s a lack of information right now about what cryptocurrency is, and I think that’s what’s driving the mistrust.”
Rounds further stated that he understood the benefits of using new technologies such as blockchain, especially in delivering services to consumers that might otherwise not have the opportunity to access them. He also said that the United States is behind other parts of the world in using blockchain technology and should find a way to appropriately regulate it.
“The rest of the world has figured that out. I don’t think you walk away from innovation because you don’t have a good regulatory process. We haven’t really updated this part of the law since 1933 — it’s about time we do.”
Last week, in a letter addressed to the Anchorage Trust Company, the Republican Senator had said that he believes there is promise in cryptocurrencies and digital payments, and regardless of how one views such technologies, the United States is clearly falling behind in the space.
He also noted how it is projected that digital wallets will comprise less than 10% of U.S. consumer in-person point of sale payments, while there were already over 100 million active mobile money accounts used by one in ten Africans back in 2017.
“Recently, the number of mobile money users in Africa has been growing by more than 30% annually. Other parts of the world are also dwarfing American innovation in payments technology. In the People’s Republic of China, more than 80% of consumers used mobile payments last year, compared to the 10% in the U.S.”
Rounds also said that it is not an appropriate response to warn companies trying to innovate, just because the government is not in a position to regulate them.
“Companies like Anchorage out of South Dakota have done their best to work with regulators, and they’ve found a way to participate in this new technology. I want to see that continue in the United States and not migrate to other parts of the world. I’d like to be part of that financial services deliver system in the future.”
The Republican Senator also spoke of how the regulatory processes in place have a real impact on the nation’s ability to be financial leaders in the future, and how the United States shouldn’t sit back and allow other countries like China to develop them first. He said,
“[If we] sit back and allow other countries to develop it, we’re going to have the financial process move out of the country and into those places where they’re actually doing a better job at regulating than we are.”