Thats all the time we have, thank you for joining us and thank you to our panelists. We have an Excellent Program the rest of the day but we will have a quick break before the. Just stay seated and we will get you started. [inaudible conversations] [inaudible conversations] if everyone could take their seats, we are going to keep the programming rolling. Holy, holy, holy. That was lively and fantastic first panel cover the waterfront the currency, payment nerds to realize, what do you do when you need money . It is the focal. Of our next. The cfpb and whether you agree or disagree what they are doing, they are doing about a massive accomplishment in washington often underappreciated. Time in government is skynet, the ability to effectuate change is what we are to judge by what we think it was for the good or ill but i can few people who are skillful and impactful in their career effectuating change before becoming director confirmed unanimously that the federal trade commission before the Company Family office for studentt loans, the impact very much today. At this moment thinking about future payments is the conversatione how this impacts peoplei and i can think of noboy better than the persons soul job to look at the Financial System from the consumers view so please come on up. [laughter] thank you for everyone who helped organize today. Let me start by saying over roughly a decade, Digital Payments mostly conducted through mobile rapidly became ubiquitous in china and to dominant Tech Companies service, millions of transactions billions every hour and the capture extraordinary amount of chinese personal data and movement of money throughout the chinese economy. In the same vein in 2019 okfacebook announced create a nw mobile currency called libra and while we have undoubtedly succeeded capturing so much information, facebook did not exceed and not become currency for in the west for consumer and Data Protection authority for Financial Stability watchdog and National Security agency and Central Banks delivered the vision of the heart over the flow of money throughout the economy and data generated remains alive around the world. It comes a uniquely vulnerable moment for the separation of banking and commerce and the debate that traces back too the earliest days of our republic. Two trends are colliding. Theologian traditional lines between core banking and commercial financial activity and growth of ecommerce and digital economy. Today i want to discuss digital dollars Consumer Household retail here in the u. S. I want to talk about Payment Systems for society and Share Analysis from inquiry and gatekeepers especially large tech firms and observations about surveillance censorship. I will close with a summary of the danger allowing private money outside the Banking System and control over shame as well as policy considerations for the future. With long known such as transportation and telecommunication are critical pieces of infrastructure of our society. Technology for ship and railways dramatically change commerce on the internet and fundamentally change how we work colleagues and see family members far away. I would argue existing money and payments are just as essential and could not be with our standard of living for this infrastructure is somewhat different relying on physical or technological attributes and the primary way through which money is created and when we keep money and banks, have it immediately in cash and can use this link money deposit to make payments give things special legal treatment to influence supply of money in our economy for to the safety net when they get in trouble and ensure for consumers and businesses their money is safe and reliable. In return the subject thanks to oversight, regulation and require and prevent all sorts of conflicts of interest like railways, energy the list goes on and on. We thanks to financial activity rather than allow them to engage in commercialco enterprise and large conglomerate. It didnt always work this way, sketchy and banks and executives create advantaged sweeping conglomerate across commercial sectors and in many ways aligning National Currency while dividing banking and commerce for money and payments and stability. The creation of Central Banks and further acknowledgment the important infrastructure components thate need Public Investment in governments. Out. The man investment for the Payment System and as they evolve driven in part by technological like the telegraph and internet invested in architecture utilities for Wire Services will tend payments. Our country is not always have this Payment Option especially over the last few decades during this time, lots private gatekeepers emerge for new private Payment Networks like visa and mastercard grow. Different names and grew up over time but ultimately so many to the Banking System relying heavily on communication rails outside of the system. At first these networks were facilitating shortterm borrowing actually charge credit card. Over time modernday democrats grew into a massive portion of the networks in general purpose through israel recently emergent some enormous users and cassia among thehe most popular especially when it comes to facilitating personal payment between friends and family. Thank owns and others are tech firms and in china allie pay and we checked pay became dominant and in the u. S. And across the globe, apple and google traffic are growing number and began to study tech firms and issued orders to Major Players for the bank in philadelphia pay teachers describing regulation imposed by apple and google and spent considerable time evaluating data handling practices and privacy protocols. These firms and regulations are often filled with people and we make it more confusing, they sometimes referred people to other policies to understand data and how it is being used and the data tumors using payment product and the use the data for a variety of purposes including market and so, payment products and majority of them other potential third parties and second, these entities retain Data Collected for extended periods of time. Companies generally require consumerss consent to use the product and lack of such consent restrict access and many or all to take it or leave it. Similarly, refilling and request for data may result in the closure of the account or inability to continue using the product. Bonnie, regardless of how the Companies Use the Data Collected, the regulations do not appear to commit limitations on future efforts to monetize including artificial intelligence. Policies are not static and evolve over time, each new. Version was opportunity to change their position on what Data Collected how it is used. It impacts how they sure with other parts of the conglomerate including commercial businesses and as i mentioned earlier, u. S. Banks are subject to restrictions when it comes to crossownership and affiliation. Payment platforms mentioned are part of big conglomerate to yosemite area. What is the problem . Within the Financial Sector has become cozier recently. Big companies are taking advantage as a moving threatening separation of banking money and payment on one side and finally on the other and engage Bank Activities under oath or complex arrangements about obligation. Naturally it will have a strong incentive for all aspects matching c the with geolocation browsing history and so much more and the data can advantaged the rest of the businesses. Detailed payments for pricing are for increased engagement with behavioral advertising businesses and corporate surveillance activity around the world raises questions about espionage tracking and censorship. There has been concern in the u. S. And abroad about the relationship between chinas tech giants and governmental entities including with respect to sharing sensitive user data andd given the massive scale giants, it can raiseo alarm bes regarding private financial censorship as well. Each of these firms control regulations of Payment Systems study on how these firms decide which users get to play on the platform and who gets the platforms and why. For example, last october paypal updated regulations to give itself the power to take unitive action against users engaged in conduct that would otherwise violate federal or state law. It was under regulation and merchants selling goods and accepting payments through these platforms report being censored. Many of these issues are top of mind for regulators and legislators when it comes to private digital dollars and privatizeded Payment Systems. In november of 2021, the Treasury Department federal regulators reduced a report on private digital dollars. Maybe found the report to be interesting especially when itt comes to outside of the Consumer Household. For example, the report is too Financial System and market combination particularly about the period from a consumer regulators perspective, its important to safeguard against aiprivate currencies just destabilized the Business Model the current creator platform Operator Service or risk or mitigate the report made helpful s suggestions, agencies explain the of 21 a few permits nonbanks from describe the benefits of the private issuers limiting the use of credit and payment and Retail Complex and they are warranted. Cfpb will issue the order for certain Technology Firms to acquire more information that will help better obtain Business Practices and plans especially with respect to the use of and any issuance of private currency, produced and are an unauthorized answer Fund Transfer act with respect to the issuance of a little. Third, cfpb nonbanks offering consumer payment. We have a number of authorities do so firms have Service Providers and another one of these stories include finding larger participants with meeting supervision. He suggested a minimum of 2020 report he is going likely to become systemically important. It could provide other agencies critical oversight to ensure its actually stable. Finally, it is important for American Consumers for stronger production against surveillance and misuse of our data. Later thiste month i will authorize publication of the proposed rule regarding personal rights and 33 of the. The rule will accelerate the shift to open competitive centralized banking while safeguard use of personal addition, all policymakers and atlegislators regulators must continue to will. Action go beyond protection. They have proven to be sufficient. Im full federal legislation can provide us with tools to deter putin conclusion, i will shortly consolidated his butcher the one that emerged in china that blurs the line payment surveillance e,and initials. The u. S. Met within the Treasury Department chart of the digital era today we have many more questions to answer and challenges to overcome. As we seek to configure an architecture to provide safe and secure electronic cash, who should show the services are aligned with our values for Consumer Protection. Thank you very much. [applause] it was hard for me to stay seated because there were so many times i wanted to jump out of my seat with what youre saying. Often to agree that would be kind of boring so lets talk about a couple of things about what you are saying. She went into talking about the breaking of commerce which is fundamental in the u. S. F but isnt it the case, he put payment on the banking side but a different way is a deposit of making loans, commercial side at least somewhere in the neutral zone so things have dominated the comparative advantages but why did you put the . I think if you look at our history, the weight and the easement to, you look at how they created was now has a fundamental Public Infrastructure component is the monopoly that cannot be 10 million payment. There could be an plus function as much about infrastructure. You look at history and its going to be different than your will want to create structure that provides innovation and progress on top of these networks and it is a place for the growth, a huge amount of private sector went down to the chinese file system where you have players retail payments, i think it introduces a real problemm. I love the view of china, i went deep years ago when it came back over the goal the things back. And our technology providing better faster cheaper services, a bunch off problems in terms of government control but they smoke the american system for merchants and customers etc. , i think you areom right to draw tt analogy in terms of all of these things but i cant question like wouldnt it be much better if its a system that pushes people and overdraft . It could a be available and will sit in my bank account tuesday because of the next business day . Was just why thats the case so one reason i mentioned the private sector rail, car many of them here, what is the incumbency bias to protect what they draw from that . You mentioned cost, there is stuff what happens when the network uses the very real within the pay system, you think about doing the same thing, the employment area need to be on the 21st way. On the other hand, the speed is among the latest paper money likeit the make on the i see the treasury paying a little, who talk about the digital going as opposed to the dollar. You see a place for the children to explore as opposed central bank . Treasury or governmentbacked digital currency. I find the entire conversation very confusing because it doesnt divide up the design element of it. So what part is issuing an, was the specification when it comes to privacy and tracking think about a fiscal. , one of the most private ways mothers no serial number on it, many things we could think about it of cassation all sorts of reasons to pursue or not pursue have the related to his issues. If we care about retail, but figure out the things most important to us. I would. Argue we mentioned safety, availability, we have a lot of tools to address that the system and beyond. There are electronic funds availability act implement to regulation and a place at the level preserved where they have authority and its worth looking at how we make Funds Available and the right level on that. When it comes to fraud, there are lots of places we can align in many cases and have seen the institutions started to move to address those. Its like rodney and im robert. You couldwme apply the balancess a potential issue and could use funds availability of the Federal Reserve consultation with you to make peoples payment faster. The first 100 check. The fact that theth fed has not, the law doesnt say may. We have heard the law but shall promulgate regulations on mortgages written in 1984 and when the feds gott around to tht important topic,ic 2007. Happened between 1994 and 2007, the Global Economy and the fed refused to follow along with regulations. This is the same have been in and it doesnt take Global Economy, hundreds of billions of dollars and put it in the hands of check caches and Bank Executives overdraft. When is the fed going to use Legal Authority and follow the law for professional let me that the central bank has many functionsf from the passage of o i think sometimes we need to think moree analytically about lincolns between the policy and provision regulation as well as Financial Stability and Consumer Protection so i do think we are overdue for the architecture and there mayay be a role for treasy and many of argued not only in termsnl of treasury securities issued, this security and you mentioned authority, i hope we start rather than focusing on phrases, focus on surveillance, censorship, fraud. We can just pick them all off i hope. Also a role for enforcing the law we have authority, you mentioned fraud and bigger wire transfers as opposed to sell or Something Like that. We have time for one more question h but a lot of conversation about frequent flyer miles and you talk about private creation money. Last night seeing the twins in the playoff and Credit Card Rewards to frequent flyer to pay for my daughters ticket, this not money somehow. I my ticket with cash, it is money and we saw the news from delta airline, do you credit card structures to drive people into the car . We are using financials to our society. You could even say look at security styling and retailers, you see how much of their business relates to credit card, financial activities. I think there is a lot in the past few years around reward. Reward we might think of in the past as very specific, a part type of arrangement but if you look at the broad range ofen activityth happening, points and rewards, theres a lot of factors. We do get a lot of questions about