Rep. Mike Lawler Questions Treasury Secretary on Combating Financial Fraud and Stablecoin Policy

Stablecoin Policy and US Competitiveness

• 🇺🇸 A core goal of US stablecoin policy is to keep dollar-denominated stable coins issued, regulated, and supervised within the United States.
• 🌍 Foreign jurisdictions are moving quickly to establish legal regimes that encourage dollar stable coin issuance in their markets, creating competition.
• 💡 US rules should preserve enough flexibility for American issuers to remain competitive and keep dollar activity on shore, transparent, and under US oversight.

Treasury's Role in Fighting Fraud

• ⚠️ Fraud scams are estimated to affect 15% of American homes, causing significant financial harm.
• 🏦 Treasury, through FinCEN, was part of a group that took down major scam centers in Asia, focusing on regions like Laos, Burma, North Korea, and Iran.
• 🤝 Treasury is working with partners to combat fraud, acknowledging that AI can be a tool for both good and bad actors.
• 📈 Properly managed AI and private sector partnerships can help reduce fraud, but caution is needed as AI can also empower malign actors.

Financial Stability and AI Concentration

• ☁️ There is a growing concentration of cloud and AI model providers, posing risks to financial sector infrastructure.
• ⚡ FSOC is assessing the financial stability implications of this concentration, particularly concerning outages, cyber incidents, or foreign remote access vulnerabilities.
• 🏠 Legislation like the Remote Access Security Act aims to ensure financial institutions' reliance on third-party AI and cloud providers does not expose the system to remote access risks.