Rep. Warren Davidson: You Have to Defend Money to Defend Freedom

In an interview with Cointelegraph on Friday, Oct. 18, United States Representative Warren Davidson gave his thoughts on the Securities Exchange Commission's flawed approach to regulating digital assets as well as Mark Zuckerberg's upcoming Oct. 23 testimony before the House Financial Services Committee.

"We use the term 'cryptocurrencies' to refer to everything in the crypto space, which is sloppy language. What we need to focus on is, what is Libra's goal? Its goal is to be a currency. Let's not conflate that with what other things in the space want to do and how we regulate them. How we look at Libra would be to apply, in my view, the Token Taxonomy litmus test."

Speaking about Libra's classification as a security, Davidson said, "It has nothing to do with stablecoins. It has to do with whether there's a central authority that can alter it." The congressman was unconvinced that the planned basket of currencies would be fixed and stable, opening Libra up to the Libra Association's tampering.

Elaborating on Libra's centralization, Davidson said, "The way that they proposed to do it - and the fact that it's Facebook doing it - highlights to me the problem with centralized tokens." Bitcoin came up as a comparison: "Whoever Satoshi Nakamoto is, you can't serve Satoshi papers. There's no headquarters to subpoena."

On the SEC's "Third-world" approach to crypto: regulation by enforcementDespite his desire to see Libra under the SEC's jurisdiction, Davidson was extremely critical of the commission's current regulation of digital assets.

In the case of the Libra Association, that money's going to Geneva.

After the SEC hearing, Cointelegraph asked whether the next steps were in the hands of legislators in Congress or regulators like the SEC. Congressman Davidson came down on the side of legislation first.

On his hopes for the Oct. 23 committee hearing with Mark ZuckerbergWith Davidson's views on Libra's status as a security established, he elaborated on what he wants to see at Wednesday's hearing.

A major concern for Davidson is the degree of control that Libra and the associated Calibra wallet will have over transactions.

"Would Libra itself - which is supposed to be a store of value, money, a currency, a synthetic currency, basically - would the association have any way to filter transactions? And if they do, then it's not really money, it's a system of control."