As federal regulation appears imminent, the crypto community is hanging on every word legislators say on the topic. Here is a roundup of some public statements made by those on the Hill so far
While lawmakers in the increasing number of statehouses are putting forward legislative initiatives that are nothing short of Blockchain-friendly (think Arizona, Wyoming or Georgia), federal policy architects on the Capitol Hill prefer to move one cautious step by another.
The month of February, however, has seen Congress finally take issue at heart and favorably incline their collective legislative ear to the SEC’s Jay Clayton’s and the CFTC’s J. Christopher Giancarlo’s crypto testimonies. Not only the landmark hearing laid the groundwork for moving the regulation forward but also elicited some of the Senators’ views on cryptocurrencies and beyond. Amid the building regulatory momentum, we round up what we already know about some of the congressmen’s stances on all things Blockchain.
Representative Jared Polis, D-CO
“The Blockchain has boundless potential.”
A poster child for a Bitcoin-friendly congressman, Representative Polis was instrumental in creating The Congressional Blockchain Caucus- a bi-partisan group rooting for the expansion of Blockchain technology and promoting hands-off regulatory approach. His initiatives included, among others, a bill that suggested making any cryptocurrency purchase under $600 tax-exempt, as well as a call for binding members of Congress and government to disclose their ownership of crypto assets.
Future prospects: Chances are that Polis is leaving the House before the end of the year. In June 2017 he announced his bid for Colorado governor, coming on top of the early polls shortly afterwards.
Representative David Schweikert, R-AZ
“This is going to create a revolution. It’s so much more than moving microcurrency.”
Schweikert, an Arizona Republican, is Polis’ closest confederate in championing the Blockchain cause. He serves as a co-chair of the Congressional Blockchain Caucus and has co-sponsored multiple bills aimed at expanding and facilitating the use of distributed ledger applications. One of his remarkable initiatives suggested that the Veterans Affairs Department implement a Blockchain system to track veterans’ medical appointments. In the 115th Congress, Schweikert sits on the Committee on Ways and Means.
Future prospects: Schweikert will be up for reelection in November 2018 in a race rated by most observers as safely Republican. Some sources speculate that he is considering a run for Arizona governor in 2022.
Representative Tom Emmer, R-MN
“The US should be the home to this innovation and should embrace these new technologies. In order for these efforts to be successful, it is imperative that we adopt a deliberate, flexible and unified approach to regulation.”
Tom Emmer is a member of the Congressional Blockchain Caucus. The quote above is from the letter authored by him, Polis, and Schweikert, and sent to the heads of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC). The message encourages the federal agencies to adopt simple and narrowly tailored regulation for cryptocurrencies and Blockchain technology that would allow them to flourish. Congressman Emmer is a member of the US House Financial Services Committee.
Future prospects: Emmer will seek reelection in November 2018 in a district that looks solidly Republican.
Senator Mark Warner, D-VI
“I was an early investor in cell phones back in the '80s, and I believe #Blockchain has the potential to be just as transformational as cell phones. As our government begins to look at #crypto, I don't think you can separate #cryptocurrencies from the technology they're based on.”
In the landmark February hearing Senator Warner earned a reputation of a right crypto-bull, envisioning the market’s capitalization exceed $20 tln by 2020. A successful tech entrepreneur and later Virginia governor, he seems to be a firm believer in Blockchain’s grand promise. Yet, Warner has his concerns, anticipating the need for a serious regulatory effort as the industry grows exponentially. Senator Warner’s current committee assignments are the following: Intelligence, Banking, Housing, and Urban Affairs, Budget, Finance, Rules and Administration.
Future prospects: Warner’s term ends in 2021, so there is a chance that he sees his $20 tln prophecy fulfilled during his current tenure.
Senator John Kennedy, R-LA
“You can extend disclosure to Bitcoin and you haven’t done anything.” (…) “Disclosure needs to make sense and help people other than the lawyers.”
The Louisiana Republican expressed his doubts as to whether the disclosure requirements imposed by Securities Act would work with Bitcoin. Whereas it does not provide clear insight into his overall stance on cryptocurrencies, it might suggest that Kennedy leans towards the commodity side of the larger security-commodity debate. A former Louisiana treasurer, Kennedy serves on the following Committees: Appropriations, Banking, Housing, and Urban Affairs, Budget, Judiciary, Small Business and Entrepreneurship.
Future prospects: having assumed the office in 2017, Kennedy’s term does not expire until 2023.
Representative Dave Brat, R-VI
“I‘m a total free-marketer, so I don’t want to regulate.” (…)“But if it’s a currency that could destabilize the whole economy, you’re going to have that conversation.”
One pattern that is consistent across all of the federal legislators’ comments is that even the most hardline free-market Republicans have some appetite for regulation. Call it a lip service or a thoughtful, balanced position, no one on the Capitol Hill wants to come across as calling for a laissez-faire approach to cryptocurrencies. Brat’s committee assignments: Budget, Education and Workforce, Small Business.
Future prospects: Brat will be up for reelection in November 2018 in a Republican-leaning district.
Representative Bill Huizenga, R-MI
“The SEC is properly the lead on the issue.”
Congressman Huizenga acts as a Chairman of the House Financial Services Subcommittee on Capital Markets. Having observed the explosive growth of cryptocurrency markets in the recent months, he is ready to hand broad regulatory authority over this class of assets to the Securities and Exchange Commission.
Future prospects: Huizenga will be up for reelection in November 2018 in a safely Republican district.
Representative Dana Rohrabacher, R-CA
"I believe we should encourage digital currencies to implement full anti-money laundry and know-your-customer standards. These protections should empower both our law enforcement and national security professionals to keep terrorists' financing under control, to protect our freedom of using digital currencies...and keep America in the lead of this technological advance.”
Speaking about the 2018 National Defense Authorization Act, Congressman Rohrabacher digressed to argue against banning cryptocurrencies altogether, citing their ability to economically empower those who live under authoritarian governments. Yet, he called for stricter anti-money laundering measures and identity tracking for the sake of national security. Committees: Science, Space, and Technology, Foreign Affairs.
Future prospects: In his bid for re-election in November 2018, Rohrabacher is expected to face serious Democratic competition in a toss-up race.
Representative Ro Khanna, D-CA
“[More regulation is needed] whether it’s against fraud, whether it’s against environmental harms, whether it’s against the use of Bitcoin to foster terrorism.”
A California Democrat, Khanna is known for being in favor of tight cryptocurrency regulation. On top of common concerns such as speculative trading, fraudulent financial schemes, and potential for securing funds for terrorism, he doubles down on the need to mitigate environmental risks that cryptocurrencies engender. One of the measures that Khanna seeks to advance is the tax on mining. Committees: Armed Services, Budget.
Future prospects: Will face reelection in November 2018 in a safely Democratic district, under a top-two primary system.
Representative Emanuel Cleaver, D-MO
“I would like to know what steps your members are taking to ensure that the Bitcoin services they provide are not being used to facilitate radical campaigns of abuse, harassment and/or violence against Americans.”
Congressman Cleaver’s primary concern is that cryptocurrencies might facilitate supplying resources to white supremacist and other extremist groups that were denied financial services by conventional providers. Rather than pursuing regulatory measures, Cleaver seeks to convey his message to the groups influential among the crypto community, such as the Bitcoin Foundation and the Digital Chamber of Commerce. Committees: Financial Services.
Future prospects: Cleaver will seek reelection in November 2018 in a district that looks solidly Democratic.
Representative Roger Williams, R-TX
“At this time, virtually all the world’s digital currencies are not compliant with the critical AML/KYC standards we expect of our other institutions. Some in the digital currency world argue that digital finance requires a relaxation of these standards. This is absolutely incorrect.”
Former Secretary of State of Texas, Williams is a staunch proponent of holding cryptocurrencies to the same regulatory standards as fiat money. Committees: Financial Services.
Future prospects: Williams will be seeking reelection in November 2018 in a solidly Republican district.
Representative Carolyn Maloney, D-NY
”A lot of people don’t realize there’s nothing backing these virtual currencies.”
It would be a marvel if in a debate like this no one showed up holding a banner that reads “Your Bitcoin is not backed by anything!” Concerned about the repercussions of speculative cryptocurrency trading, Congresswoman Maloney calls for a tighter oversight on behalf of SEC. Committees: Financial Services; Oversight and Government Reform.
Future prospects: Maloney will seek reelection in November 2018 in a solidly Democratic district.