WASHINGTON, DC - Congressman Warren Davidson, a member of the House Financial Services Committee, joined Bloomberg's David Weinstein recently to discuss trade with China and the upcoming Facebook-Libra hearings in Congress. Davidson talked about using targeted sanctions against bad actors, including individuals and companies instead of sweeping tariffs. He also discussed with the host how his legislation, the Token Taxonomy Act, might impact the cryptocurrency sector and tech innovation in America.

Highlights are provided below or you can click this link to watch the full segment. 

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America has been on the receiving end of bad trade policy for a long time. China has taken advantage of that by allowing intellectual policy theft, dumping of steel, access to the Chinese market.  

"For companies that are dumping or companies that are stealing intellectual property, it doesn’t have to be about China, it could be against these individuals and their companies and that’s where China’s been reluctant. They get protection from China. If we could unite the world and use targeted sanctions against the bad actors we could just go after the bad practices and I think we could build a lot of unity around that."

On Facebook's filtering of content and data privacy concerns. 

"I really think that a lot of people have concerns about Facebook's filtering of content which comes from the fact that Facebook has a lot of data. What are they gonna do with this data? Can they safeguard it?” And at the end of the day, because they’ve proposed a sort of variation of a coin called a “stable coin” they inherently have to have a stable authority. So, will it ever really be decentralized? And I think at the core of it is can a stable coin that is really a synthetic currency comprised of 5 currencies, a basket of currencies, truly be stable? Because you’ve got variances among the currencies."

Once we update U.S. financial laws, there are advantages to Facebook-Libra and other crypto companies launching in the U.S. 

"A lot of these innovative companies are launching in places like Switzerland and Singapore because the U.S. doesn’t have the right laws in place. A lot of times when you see companies leaving our market they are leaving to avoid U.S. law. In this case, these companies are leaving for places like Switzerland and Singapore to find legal certainty. They need legislative certainty so that the capital formation can take place." 

Davidson's Token Taxonomy Act provides a solution. Solving idea-flight should be a top priority for Congress during the Facebook-Libra hearings. 

"We need light-touch legislative certainty in the U.S. in this space, which is why we have a non-partisan bill the Token Taxonomy Act that gets to the heart of defining what a 'Digital Token' is. The SEC has driven a lot of capital offshore by failing to provide that certainty that companies need to succeed. And that’s not entirely their fault, that’s what Congress is supposed to do. The great thing is that we are finally getting the hearing that a lot of us have asked for."