Innovation Revolution: How Technology is Shaping the Future of Finance (EventID=117742)

Connect with the House Financial Services Committee
Get the latest news: democrats-fina...
Follow us on Facebook: / housefinancialcmte
Follow us on Twitter: / fscdems
___________________________________
On Wednesday, December 4, 2024, at 10:00 a.m. (ET) full Committee Chairman McHenry and Ranking Member Waters will host a hearing entitled, “Innovation Revolution: How Technology is Shaping the Future of Finance."
___________________________________
Witnesses for this one-panel hearing will be:
• Denelle Dixon, CEO and Executive Director, Stellar Development Foundation
• Avlok Kohli, CEO, AngelList
• Nathan McCauley, CEO and Co-founder, Anchorage Digital
• Henry Ward, CEO and Co-founder, Carta
• Alan Butler, Executive Director, Electronic Privacy Information Center
___________________________________
Background
Innovation is central to human progress. It has allowed individuals to live longer, healthier, and more productive lives. Moreover, innovation has been central to economic growth and prosperity in the United States, when harnessed responsibly. There are several definitions of innovation and all of them coalesce around the concept that innovation is a process, procedure, product, or service that has been improved through the use of technology. Innovation involves risk-taking and entrepreneurship by individuals and businesses, including small businesses, as well as government, private sector, and public support. Changes initiated by innovation can cause disruption, where certain business models may fail, and consequently impact industries, government, and society. Over time, however, the continuous search for improved ways of doing things will drive human learning and, ultimately, economic, social, and cultural prosperity.
Innovative Technologies in Financial Services
Financial technology companies (fintechs) are offering innovative financial products and services to meet evolving consumer demand. The term “fintech” is broad, encompassing technologically enabled innovation that supports new business models, applications, processes, or products with an associated material effect on financial markets and institutions and the provision of financial services. Generally, a fintech firm employs technology to with the goal of enhancing financial services for consumers, businesses, and/or the government. The range of services offered by fintechs is equally broad. Fintech firms may offer products and services in different segments of financial services - including payments, insurance, regulatory and supervisory functions, and cybersecurity, among others. The development of new financial products and solutions by entrepreneurs has the potential to be transformative in all financial services segments, when done responsibly.
Many legacy financial institutions also utilize technology, or work with a fintech firm, to bolster their use of technology with the goal of enhancing their services, reaching new customers, and lowering costs to consumers. For example, banks and credit unions often partner with third-party vendors to meet the evolving needs of consumers and businesses of all sizes. Such partnerships can expand access to, and reduce costs of, financial services but can also present risks. If done responsibly, these partnerships can expand opportunities in the form of access to financial services to households and businesses who may be traditionally underbanked or unbanked.
Blockchain Technology & Digital Assets
Blockchains and their related digital assets have the potential to serve as the building blocks of the next generation of internet technology. Blockchains enable the creation of networks that can facilitate new, cooperative ways to offer services, like access to financial products, social networks, and shared computing systems. User-developed, controlled, and owned networks could one day offer an alternative to existing networks and services offered by large companies and other centralized actors. However, the benefits of decentralization may not be fully realized in current use cases.
These democratized networks may allow users greater autonomy, privacy, and control over their activities on the internet, as well as potentially reduce costs in accessing these services. Digital assets associated with blockchains have so far been used for the development and operation of these new networks. These digital assets have served as a medium of exchange within each network. Today, the total digital asset market capitalization is approximately $3 trillion with Bitcoin and Ether comprising approximately 70 percent of the market.
Stablecoins are a type of digital asset designed to offer price stability. Stablecoins are pegged to another asset’s value. The most popular stablecoins are currently pegged to the U.S. dollar...
Hearing page: democrats-fina...