If the US government wants to figure out how to effectively regulate Bitcoin and cryptocurrencies while encouraging technological growth, elected officials on Capitol Hill will first need to learn how Bitcoin works.
Old Suits, New Technology
The average age of Members of the House at the beginning of the 114th Congress was 57.0 years; of Senators, 61.0 years — and almost all of them have no experience with Bitcoin or the cryptocurrency market.
One can count the number of verified Bitcoin supporters in Washington two hands. Only Gary Johnson, Greg Abbott, Jared Polis, Marco Rubio, Rand Paul, Adam Kokesh, and Patrick Smith are full-fledged Bitcoin supporters — as well as the Libertarian Party — though that’s likely more of an indicator that they’re interested in accepting BTC donations than proof they actually know what it is, let alone how to regulate it.
As such, Congress is finding it nearly impossible to grapple with an exploding technology, which threatens to undermine Central Banks and government control over currency.
In fact, some might even argue they lack the ability to affect positive economic policy in the first place — and cryptocurrency has only made matters worse.
Insufficient laws and no real solutions
As noted by The Hill, cryptocurrency investors are hungry for clarity. While Congress dithers, however, fears of ineffective regulation aren’t helping the cryptocurrency market rebound from a full-fledged crash.
Worse yet, ineffective regulatory measures from legislators ignorant of cryptocurrency’s potential could stall the burgeoning industry for years — if not permanently damage it. Explained a financial technology lobbyist:
Until they decide to think radically differently about how to regulate financial services, I don’t know how this is going to get resolved so cleanly.
Moreover, many of the financial laws already enacted by Washington are old, outdated, and entirely insufficient to apply to the Internet, let alone cryptocurrency — but that hasn’t stopped regulators from tacking Bitcoin and brethren on to them. Brian Knight, director of Mercatus Center’s financial regulation program, told The Hill:
A lot of our laws are fairly old. They’re fairly dated. The regulators have been sort of writing rules on top of the laws, some of which may make sense, some of which may be outdated themselves.
The Waiting Game
To Capitol Hill’s credit, it has thus far exercised restraint in passing knee-jerk legislation in regards to Bitcoin and brethren, as it attempts to learn what cryptocurrency truly is. Explained Rep. Randy Hultgren (R-Ill.) at the House hearing:
Congress needs a strong understanding of the technology and its application before we can understand how it fits into our existing regulations and the laws we have on the books may encourage or inhibit an efficient market. There are a lot of questions in this.
Still, waiting too long to pass inevitable cryptocurrency regulation isn’t doing the market any favors.
Not only does the market continue to crash while institutional investors wait to see what will happen, but nobody is quite sure which agencies will regulate which aspects of the cryptocurrency market.
“It’s a question of who’s going to regulate and are we going to have multiple parties with multiple rule-sets regulating it,” Knight told The Hill. “That’s an area where Congress should at least consider stepping in.”
Until then, expect the federal government’s tax collectors to keep raking in the revenue while ensuring the United States Dollar monopoly remains firmly intact.
What do you think about US legislators’ handling of Bitcoin and cryptocurrency regulation thus far? Let us know in the comments below!
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