Where the U.S. Government Went Wrong in Regulating Crypto
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“If you are not upset … you are not paying attention …” I haven’t used this phrase since a U.S. president separated children from parents, but it is time to break it out again.
As a former public servant, I believe there is a role for the government in overseeing the cryptocurrency industry. However, recent regulatory announcements – including directives from the U.S. Federal Reserve and executive branch designed to debank crypto firms, a pending lawsuit against the largest and most trustworthy U.S. exchange, Coinbase, and increasingly hostile rhetoric from Congress – are far from appropriate.
Keiko Yoshino is the executive director of the Puerto Rico Blockchain Trade Association.
President Joe Biden’s annual "Economic Report," published Monday, was a not so subtle declaration of how his administration views cryptocurrency. Coupled with the Federal Deposit Insurance Corporation going after Signature Bank because it held crypto assets, is nothing short of an abuse of power.
In 2008, the U.S. Treasury Department spent approximately $245 billion to stabilize (aka bail out) banking institutions. As a result, we printed money, which created inflation and triggered a recession. I was one of thousands, during the Great Financial Crisis, who couldn't find a job after graduation and moved back home before going to grad school. This yer is looking to be more of the same. Last week the Fed added $300 billion to the balance sheet, bringing its total debt to $8.6 trillion.
Crypto was not only born of that financial crisis, but has emerged as an alternative. Why do I use crypto? Because the dollar is inflationary. Full stop. In Puerto Rico, eggs are currently $7.50 a dozen, and it is just a matter of time until the price goes to $10. That alone should be reason enough to explore other forms of currency.
There are a dozen other reasons for "why crypto" and twice as many misinformed reasons being shopped around by banks and the government as to why it should be severed from the existing financial system.
But let’s just pretend that there was an alternative currency that was resistant to inflation, could be stored securely on our phone and sent to anyone at any time without a fee. Wouldn't that be something worth exploring? I think so.
See also: The World's Best Crypto Policies: How They Do It in 37 Nations
Change is hard. But making the same mistakes over again is worse. We have lived through repercussions of putting our life savings in banks and being wiped out in 2008. I am not saying make crypto the official currency tomorrow, but we shouldn't be waging a war against it. We shouldn’t be discouraging banks from holding it or people from buying it if they want to. We shouldn’t be stifling innovation.
Benjamin Franklin said, “Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.”
You don’t even have to own crypto to be upset about the predictable cyclical inflation we are entering again or the government’s attempt to censor an industry. You just have to pay attention.