As cryptocurrency and blockchain mania takes hold in the finance world, as well as among retail investors buying and selling coins with the click of a button, interest and literacy in digital currencies are also taking hold among members of Congress.
Once viewed negatively in Congress and among regulators as dangerous, untested technology or a tool for buying and selling on the black market — the recent ransomware attack on Colonial Pipeline paid in Bitcoin also hurt the image — a growing number of lawmakers are warming up to Bitcoin and other blockchain currencies. In fact, some are slowly working toward passing laws and clarifying regulations in the cryptosphere while preserving the ability for innovation in the field.
In demonstrating increased engagement with the issue, Wyoming Republican Sen. Cynthia Lummis and Ohio Republican Rep. Warren Davidson spoke at the Bitcoin 2021 conference in Miami on Friday.
“We protected innovation in the internet age, and the internet economy flourished,” said Davidson, who regularly appears on Bloomberg TV as a Congressional cryptocurrency expert. “We need to actually protect the good ideas.”
CRYPTOCURRENCY MINERS PULL OUT OF CHINA AMID BEIJING CRACKDOWN
“When the regulators start making it difficult for you to do business, Congress needs to step in,” Lummis said, adding she is optimistic about passing legislation. “There are getting to be enough members of Congress that are at least aware of the innovation that you’re providing and that it’s going to be beneficial in the future and that we can’t stop it.”
When she was elected to the Senate, Lummis became the first member of the upper chamber to report holding cryptocurrency. She owns $100,001 to $250,000 worth of Bitcoin, according to a financial disclosure report filed May 2. She said she got interested in Bitcoin when looking for “great stores of value” like gold, and having “skin in the game” helped her learn about its benefits.
Other lawmakers friendly to cryptocurrency, like Davidson, choose not to hold any to avoid a conflict of interest as they seek to pass regulations friendly to the technology.
Last month, Lummis founded the Financial Innovation Caucus in the Senate along with Democratic Arizona Sen. Kyrsten Sinema. On the House side, the Congressional Blockchain Caucus, founded in 2016, now has 27 members.
Democratic Rep. Jake Auchincloss of Massachusetts, vice-chairman of the House Financial Services Committee (but not a member of any blockchain caucus), told the Washington Examiner the “conversation around blockchain is certainly ramping up. “I think both in our society at large and, from what I can tell, in Congress.”
He recently held a conversation on Clubhouse about cryptocurrency and U.S. policy.
“When you’ve got a new technology that has a clear potential to really be a feature of the financial services industry for the next generation, we should be looking at it,” Auchincloss said.
“I’m somebody who is optimistic about the ability of technology to improve productivity,” he added.
But while he is “optimistic” about technology improving productivity, he has a “healthy appreciation that technology has downsides, and the role of government is to protect citizens and consumers from some of those nefarious uses.”
Perianne Boring, president of the Chamber of Digital commerce, the largest trade association representing blockchain technology, told the Washington Examiner she has seen a “dramatic difference” in Congressional understanding and attitudes toward cryptocurrency compared to when she founded her organization in 2014.
“Where we started was very, very few people actually understood this technology [and] very, very few people were interested,” Boring said. “Most people who knew about Bitcoin, all they knew is that it was used to buy something illegal, and there’s a lot of negative connotation towards that.”
Today, she said, “There are many, many people on Capitol Hill — both members, elected representatives, and staff — who are educated on this topic, they understand how the technology works. And they’re also taking the time to meet with businesses and companies that are building products and services using this technology to understand the friction points from a regulatory perspective and are helping on the policy issues.”
Earlier this year, the House for the first time passed a bill — the Eliminate Barriers to Innovation Act — that directs the Commodity Futures Trading Commission and the Securities and Exchange Commission to form a working group and a report that analyzes the legal and regulatory framework around digital assets under their jurisdiction. The group will also form recommendations on best practices and standards in the industry.
Other key pending bipartisan cryptocurrency legislation in Congress includes a bill from Florida Democratic Rep. Darren Soto to create a Blockchain Center of Excellence within the Department of Commerce, as well as the 21st Century Dollar Act, which would direct the Treasury secretary to create a report on central bank efforts — including in China — to create digital currency.
“We know that China is putting together the digital Yuan,” Lummis said Friday.” And we absolutely have to catch up.”
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
Part of the appeal of cryptocurrency in an ideological sense is its removal from central banks manipulating its value — music to the ears of libertarians and government skeptics.
“The Fed is basically ‘Dogecoining’ the U.S. dollar,” Davidson said Friday, comparing the dollar to the popular joke coin in that both allow unlimited numbers to be minted. “There’s a benefit to scarcity that the Dogecoin owners don’t apparently get.”
In contrast to Dogecoin and the dollar, Bitcoin technology will have only a set number of coins created: 21 million.
