American cryptocurrency advocates want to convince the Biden administration that digital assets do more than “finance criminal enterprises,” according to a report from Fox Business.
The Blockchain Association, a leading blockchain and crypto trade organization, will be “mounting a charm offensive” with regulators of the new Biden administration, according to executive director Kristen Smith.
Smith claims that her organization has already been meeting with staff of the US Treasury Department. “We’re hoping to speak to Treasury Secretary Janet Yellen or Deputy Secretary-nominee Wally Adeyamo in a few weeks,” Smith said. She added that Adeyamo would be the point man for crypto and other technology matters.
“Our number one priority is helping Yellen understand crypto goes beyond the financing of criminal enterprises,” Smith emphasized. “We want her to understand the value of crypto networks.”
Recently, Yellen said Bitcoin (BTC) was “highly speculative,” and “an extremely inefficient way of conducting transactions.” She expressed concern over the “growing problem” of cryptocurrency “misuse.” Although not thoroughly versed in blockchain applications herself, she said of BTC, “to the extent that it is used, I fear it’s often for illicit finance.”
Regulatory Concerns of the Industry
This institutional perspective does not sit well with cryptocurrency advocates. They fear that holding the nascent industry to the same standards as established financial institutions would seriously inhibit adoption and innovation.
The so-called “Travel Rule” is one concerning example. It requires financial institutions to adhere to record-keeping procedures enacted in the Bank Secrecy Act. Its purpose is to make sure banks are monitoring their transfers and not enabling money laundering. Supporters claim that larger crypto exchanges, such as Coinbase, already monitor their transactions. However, they feel individual wallet holders should be exempt.
“We’re not opposed to regulation and compliance,” said Adam Traidman, CEO and co-founder of crypto app BRD. “But we need time to spur innovation and grease the skids for the adoption of crypto first,” he continued.
Cryptocurrency advocates are hopeful for a moratorium or temporary postponement on regulations because of a similar precedent established in the 1990s.
In the age of the early internet, the Communications Decency Act was ratified to protect new tech companies and help them compete with established competitors. Specifically, Section 230 prevents social networks from being sued for content users post on their platforms.
Advocates hope to exempt one aspect of cryptocurrency use in particular from regulation. “One of our main goals is to carve out crypto-to-crypto transactions from most regulations,” Traidman said. “If crypto transfers have to meet wire transfer rules, that will harm the industry.”