U.S. Congressman Jim Himes says that Congress is not ready to pass cryptocurrency legislation anytime soon, citing a lack of deep understanding of cryptocurrencies among lawmakers.
Congress Won’t Pass Crypto Legislation Anytime Soon
In an interview with Yahoo Finance on Friday, U.S. Representative Jim Himes revealed some of the debates going on in Congress about cryptocurrency legislation. The Connecticut representative chairs the House Financial Services Committee’s National Security, International Development, and Monetary Policy Subcommittee. He previously spent 12 years at Goldman Sachs, an investment bank.
His crypto comments came as the U.S. Treasury published a proposal to require businesses to report crypto transactions above $10K to the Internal Revenue Service (IRS).
Himes said that Congress is not ready to act on crypto legislation anytime soon. “Most of my colleagues don’t have a deep understanding of cryptocurrencies, what they can do, what the dangers are,” he described, emphasizing that “Congress has not spent a lot of time on it.” The lawmaker elaborated:
“So, for better or for worse, there’s not going to be legislation passed out of the United States Congress anytime soon. That said, more and more of my colleagues are becoming aware.”
Even if his assumption about politicians turns out to be right, observers are concerned about other types of government control in the near future. Chairman of the Federal Reserve, Jerome Powell, recently suggested that the Fed could get more interested in the space by issuing a digital currency.
“The latter part of 2021 and early 2022 could be a turning point for cryptocurrencies around the world. Regulators have cryptocurrencies on their agenda as a key priority,” wrote Deutsche Bank analyst Marion LaBoure in a recent research note.
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“Innovative concepts, that’s interesting,” Himes said, “but what does it really do, what problem does it solve?” He reiterated, “Tell me what the other benefits are,” pointing out that the benefits to “drug dealers, human traffickers, [and] possible terrorists” are fairly obvious to him. “That is kind of a general environment in Congress where people are saying ‘tell me again what is nice about cryptocurrencies, what problem does it solve,’” the congressman explained.
Senator Elizabeth Warren recently asked if bitcoin takes advantage of small investors, if they are too easy to rob, and if “there is a real concern regarding the environmental impact” of cryptocurrency mining.
For the time being, Himes believes the legislative response to cryptocurrency volatility would be similar to the response to recent GameStop speculation, which resulted in congressional hearings but little action.
“It is very clear to me that there’s a lot of people out there who believe that trees grow to the sky and will get a very expensive education in what the downside of volatility looks like,” says Himes.
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