Good afternoon Chair Castro, Vice Chair Aquino, Spokesperson Anderson, and Senators. My name is Jane Doyle and I am the Senior Regulatory Policy Associate at Woodstock Institute. Woodstock advances economic justice and racial equity within financial systems through policy advocacy and research at the local, state, and national levels. Woodstock envisions a society where all people experience economic security and prosperity, which is where we come into this conversation.
Cryptocurrencies and digital assets have proliferated rapidly across the country in recent years, and regulation has struggled to keep pace. There are gaps at the federal level, and we support IDFPR stepping in to fill those from the state level.
The crypto industry has tried to bill itself as the silver bullet for economic inequality and financial inclusion, particularly for communities of color. Over the last couple of years, crypto crashes and high profile crypto scams have exposed how that characterization of the industry is false. It’s an industry that tends to thrive on being poorly understood, and that – combined with crypto companies targeting communities of color and low-income consumers – creates opportunity for predatory practices.
According to an article published by Bloomberg just today, crypto kiosks, also known as crypto ATMs, are disproportionately installed in Black and Hispanic communities across the country. These crypto ATMs charge fees as high as 22% to change cash into cryptocurrency, and the vast majority of crypto ATMs (92%) don’t allow users to exchange crypto back into cash. It’s not surprising then that experts refer to crypto ATMs as a form of “predatory inclusion” – targeting marginalized communities with an excessively expensive service under the guise of financial inclusion.
We need regulators to have the authority and resources to keep an eye on these companies, to protect both consumers and our financial system.
Thank you for allowing me to testify today.
