Judging from the most eye-catching headlines from two separate hearings on Capitol Hill Wednesday, it’s tempting to conclude there has been little of it from U.S. regulators and legislators in their comprehension of cryptocurrencies these past five years.
In fact, Rep. Brad Sherman’s laughable suggestion during a House Financial Services Committee hearing in the house that the U.S. ban mining and purchases of bitcoin could suggest we’ve gone backward since bitcoin was first discussed in Congress in the fall of 2013.
At that time, the sight of Jennifer Shasky Calvery, then-director of the Financial Crimes Enforcement Network (FinCEN), telling bitcoin exchanges and wallets they needed to register with FinCEN, was ultimately viewed positively by crypto enthusiasts. In showing that regulators like her weren’t inherently hostile to cryptocurrencies, Calvery’s comments led to a doubling in bitcoin’s price over the following two weeks to more than $1,100 in early December.
Now, five years on, some officials do sound a bit hostile.
At a separate hearing the same day as Sherman’s grandstanding, Federal Reserve Chairman Jerome Powell said cryptocurrencies are “great if you’re trying to hide or launder money.” Had he noticed how the FBI had traced the bitcoin transactions of the 12 Russians indicted last week for trying to tamper with U.S. elections?
The folly of his position was indirectly identified over at the other hearing, where Chairman of the House Agriculture Committee Michael Conaway — who presumably did not intend to take a dig at the Fed Chairman — joked, “As long as the stupid criminals keep using bitcoin, it’ll be great.”
It’s best to look beyond the eye-catching headlines, however. In the wider context, it’s clear that we have actually come some way forward in regulatory comprehension of this technology. And that’s a good thing.
The sheer frequency with which governments, both here and in the rest of the world, are engaging on the topic is itself acknowledgment that it’s an important development that’s here to stay. It’s hard to keep track of how many hearings, symposiums, workshops and conferences are either sponsored by governments or attended by their officials. Consider also how dozens of law firms, a community that’s constantly interacting with both regulators and legislators, either have crypto practices or are doing research and education into how the law should deal with this issue.
The folks at Coin Center and others in the crypto space who’ve been engaging with regulators since 2013 remark that non-political staff members from the Securities and Exchange Commission, the Commodity Futures Exchange Commission and various other agencies are now much more comfortable using the language of this industry than back then.
This is the gradual way that change occurs within the creaking bureaucracy of Washington.
Read the full post at Coindesk.
Michael Casey is a Senior Lecturer at the MIT Sloan School of Management and Senior Advisor for the Digital Currency Initiative at MIT’s Media Lab.