Republican Senator Cynthia Lummis of Wyoming, often dubbed the “Queen of Crypto,” has fought for wider Bitcoin adoption. While her stance purports to favor pro-crypto innovation, others are skeptical.
Senator Lummis is a vocal supporter of Bitcoin and other cryptocurrencies. Lummis has collaborated with Senator Kirsten Gillibrand (D-NY) on the Responsible Financial Innovation Act, whose goal is to clarify regulations around crypto. She has gained the nickname the “Queen of Crypto” for her advocacy. Recently, Lummis has pushed for global Bitcoin adoption, arguing that it can help individuals and governments worldwide.
But is there a conflict of interest here? Should the owner of so much crypto wealth be writing legislation around crypto? These are some of the questions that may be on people’s minds as Lummis backs crypto at the Senate level.
Vocal Bitcoin Supporter
Lummis has been a Bitcoin investor since 2013 and has been vocal about the importance of digital currency. In an interview with CNBC in December 2020, she stated that Bitcoin is a store of value. As well as an excellent hedge against inflation. Lummis also highlighted that Bitcoin is decentralized, meaning that no government or entity can control it.
The senator has been using her position to push for policies that would benefit the cryptocurrency industry. In particular, she has worked to ensure that cryptocurrency regulations are manageable and do not stifle innovation. Even pushing for the government to adopt Bitcoin as a reserve asset.
In March 2021, Lummis participated in a virtual event organized by the Bitcoin Association, a trade organization for the industry. During the event, she emphasized the importance of Bitcoin and other cryptocurrencies for individuals living in unstable countries.
She argued that cryptocurrencies could provide a stable store of value and a means of exchange. Especially for those who do not have access to traditional banking systems.
Lummis has also pushing governments to adopt Bitcoin. She argued that Bitcoin is an excellent way for governments to diversify their holdings and protect against inflation. Further, Bitcoin could help countries under sanctions from the United States to trade with other countries.
Helping the Cause
Lummis’s reputation as the “Queen of Crypto” rests partly on her advocacy for the industry, but also on personal investments in cryptocurrency. According to a financial disclosure report (Periodic Transaction Report) filed in 2021, Lummis owned between $50,000 and $100,000 worth of Bitcoin.
Lummis has stated that she views Bitcoin as a store of value similar to gold. And also advocated for its use. For instance, a new video has appeared on Twitter where Lummis praises the cryptocurrency’s role in Venezuela and El Salvador.
Moreover, Lummis said it could work wonders globally. The senator is on the schedule for Miami’s Bitcoin 2023 conference next month.
In addition, she’s a proponent of creating a clear regulatory framework for the cryptocurrency industry. Arguing that it will help to promote innovation and protect consumers. Last year, the Republican Senator and Democratic Senator Kirsten Gillibrand from New York introduced the Responsible Financial Innovation Act.
This bipartisan legislation encouraged “responsible financial innovation, flexibility, transparency, and robust consumer protections while integrating digital assets into existing law.”
Meanwhile, she co-authored legislation to encourage CFTC rather than SEC oversight of cryptocurrency. The critical component of said act is to classify digital assets (commodities or securities) and which agency should regulate them.
Conflict of Interest?
One concern that arises is whether an unacceptable conflict of interest exists here. Should the owner of so much crypto wealth be writing legislation around crypto? Is Lummis’s support opportunistic (driven by personal financial criteria) or a principled stand informed by deep knowledge?
Two sides emerge on this narrative: supporting her stance and countering her motive.
Focusing on the latter, Dylan Hedtler Gaudette, senior government affairs manager at the Project on Government Oversight, asserted:
“[It] calls into question whether she is approaching this bill from the perspective of wanting what is best for society as opposed to wanting what will benefit an industry that she is closely tied to and directly invested in.”
Gaudette added:
“It’s a classic conflict of interest, plain and simple.”
Whereas, regarding Lummis’s support for cryptocurrency, it is difficult to say whether it is driven purely by personal gain or an honest commitment to fiscal principles.
While it is true that Lummis has a significant personal investment in cryptocurrency, she has also been a passionate advocate for technology. She has spoken about the industry’s need for regulatory clarity and consumer protection.
Furthermore, it is worth noting that Senator Lummis has a background in finance and has served as the Wyoming State Treasurer, where she gained experience working with financial markets and investments.
Her support for cryptocurrency may arise from her knowledge of these subjects and her belief in the potential of blockchain technology to disrupt traditional financial systems.
Countering the Threat
Senators or elected officials can propose and support legislation promoting the development of crypto-related industries and protecting the rights of individuals who engage in crypto transactions. They can also advocate for policies fostering innovation and technological advancement in crypto.
However, the SEC (US Securities and Exchange Commission) is an independent regulatory agency that oversees securities markets and is crucial in regulating the crypto industry. Senators may need help countering the SEC’s actions, as the agency has the authority to implement regulations that can impact the industry’s development.
Ultimately, the success of any pro-crypto agenda will depend on various factors, including the overall political climate, public opinion, and the level of support from other lawmakers and stakeholders.
BeInCrypto reached out to Senator Lummis’s office for comments on her agenda. And whether it counters the threat from Gary Gensler’s repressive, anti-innovation SEC and the Biden administration.
However, the senator’s office replied in a single sentence:
“We’ve designed [the crypto bill] so it works within the customary framework for managing and regulating traditional assets.”
Assessing the Agenda
Senator Lummis has proposed several bills related to cryptocurrencies during her time in the Senate. Her crypto agenda includes the following proposals:
- Creating a favorable regulatory environment for cryptocurrencies: Senator Lummis believes cryptocurrencies should be regulated to allow innovation to flourish while protecting consumers. She has proposed a bill to create a safe harbor for cryptocurrency developers and service providers from specific securities laws for three years, giving them time to develop their products without fear of regulatory action.
- Encouraging the use of blockchain technology: Senator Lummis has also proposed a bill to establish a blockchain center of excellence within the Department of Commerce to promote blockchain technology in government and industry.
- Educating Congress and the public about cryptocurrencies: Senator Lummis has been actively working to educate her colleagues in Congress about the benefits of cryptocurrencies and blockchain technology. She has also been speaking publicly about the potential of these technologies to promote financial inclusion and economic growth.
It is difficult to predict the effectiveness of Senator Lummis’s crypto agenda on a legislative level, as it will depend on several factors, including the political climate, the support of her colleagues in Congress, and the willingness of regulators to embrace her proposals.
However, her proposals have received support from some members of Congress and the cryptocurrency industry, which suggests that they have the potential to gain traction. Ultimately, the success of Senator Lummis’s crypto agenda will depend on her ability to build bipartisan support and work with other legislators and regulators to promote a regulatory framework that supports innovation while protecting consumers.
Concerns on the Adoption Path
Lummis is not alone in her advocacy for Bitcoin adoption. There is growing interest in Bitcoin and other cryptocurrencies among governments and institutions worldwide in recent years.
In October 2020, PayPal announced that it would allow its customers to buy, sell, and hold Bitcoin and other cryptocurrencies. In February 2021, Tesla announced that it had purchased $1.5 billion worth of Bitcoin and would accept it as payment for products.
However, there are still many obstacles to global Bitcoin adoption. One of the biggest is regulatory uncertainty. Governments are still figuring out how to regulate cryptocurrencies, and there is a patchwork of laws and regulations that vary from country to country. This can foster much uncertainty for businesses and investors who want to enter the cryptocurrency market.
Another challenge is the perception that cryptocurrencies are primarily used for illicit activities, such as money laundering and terrorism financing. While it is true that cryptocurrencies have been used for these purposes, the vast majority of cryptocurrency transactions are legitimate.
Governments and institutions need to recognize this and work to prevent illicit activity without stifling innovation in the industry.
Despite these challenges, Lummis remains optimistic about the future of Bitcoin and other cryptocurrencies. She believes that they can help individuals and governments and is working to ensure that the regulatory environment is conducive to innovation in the industry.
Whether Bitcoin will become a widely adopted global currency remains to be seen, but Lummis is certainly doing her part to make it happen.
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