Democrat division over crypto isn’t all bad news for regulation
The Biden Administration has just passed an executive order furthering research into crypto assets in view of regulating them, but politicians within the ruling Democrat party remain deeply divided on digital currency.
The lack of consensus among Democrats could mean that a progressive regulatory framework for cryptocurrencies could still be a long way off —but also makes it more likely the eventual regulations won’t be too harsh thanks to the work of crypto-friendly representatives. The crypto community is familiar with the names cropping up time and time again in the digital asset debate.
On the one side, you have vehemently anti-crypto politicians such as Democrat Senators Elizabeth Warren and Sherrod Brown, and in the pro-innovation camp are the likes of Democrat Congress members Ritchie Torres and Jim Himes.
The division runs deep, and political wrangling could further delay any regulatory processes in the United States.
Senator Warren recently crafted a bill to restrict crypto exchanges to prevent digital assets from being used for sanctions evasion. However, it has been widely reported that Russia will not switch to cryptocurrencies to circumvent sanctions, even if so individual Russians do.
Warren has continued her war on crypto with letters to the Treasury urging further crackdowns on the industry. According to reports, she recently criticized the banking system, adding in reference crypto:
“However, substituting an unregulated, unverified system in which scammers and cheats and terrorists mix in with ordinary consumers, and no one can tell who’s on the other side of a transaction is not a safe substitute.”
Fortunately, several Democrat lawmakers favor the crypto industry and the innovation it will bring to the U.S. financial system. One such policymaker is New York representative Ritchie Torres who said, “the project of radically decentralizing the internet and finance strikes me as a profoundly progressive cause,” before adding:
“You should never define any technology by its worst uses… There’s more to crypto than ransomware, just like there’s more to money than money laundering.”
Democrat Josh Gottheimer, who represents New Jersey, has pushed plans to regulate cryptocurrencies and stablecoins. Last month, he put forward the Stablecoin Innovation and Protection Act, stating at the time that the “expansion of cryptocurrency offers tremendous potential value for our economy.”
Four Democrats put their names to a bipartisan letter sent to the Securities and Exchange Commission on March 16. Gottheimer, and Torres signed of course, along with Florida representative Darren Soto and Massachusetts Congressman Jake Auchincloss.
Republican congressman Tom Emmer drafted the letter, which was also signed by three other Republicans, addressing the issue of overburdening crypto companies with excessive reporting requests and increased scrutiny of the industry by the agency.