This is an opinion editorial by Niklas Kleinworth, a research assistant at the Idaho Freedom Foundation, which is a public policy think tank.
As Congress seeks to refine the federal government’s stance on cryptocurrency, one must be wary of policies that permit favoritism of the interests of bureaucrats over Bitcoiners. Though Bitcoin itself cannot be regulated, federal control could stunt progress in orange-pilling[1] nocoiners by making bitcoin less practical to access and exchange. Bitcoiners should support legislation that both simplifies the industry’s relationship with the U.S. government and offers protections against bureaucratic overreach.
Senators Cynthia Lummis and Kirsten Gillibrand’s cryptocurrency legislation[2] is a highly anticipated[3] and celebrated milestone in the industry as it recognizes the role that bitcoin plays in the U.S. economy and offers a regulatory framework for many of the gray areas that have plagued government interactions with the business of bitcoin. Among these, the bill[4] would designate the Commodities Futures Trading Commission (CFTC) as the regulatory body for cryptocurrency matters, define bitcoin as a commodity rather than a security, and improve market transparency for stablecoins. This approach could lead to more innovation and greater adoption of bitcoin as it is applied to everyday transactions.
Despite the merits of the bill, Bitcoiners should be skeptical about this new policy direction in Washington, D.C., as a regulatory framework is no more restrictive on bureaucratic agencies than the edges of a blank canvas for a painter. The Lummis-Gillibrand bill touts[5] the creation of this framework but fails to implement any protections against the very entity that is threatened by the Bitcoin ethos of decentralizing wealth and rendering fiat obsolete: the federal government. By imposing a regulatory framework without implementing guards against bureaucratic overreach, the
