The first part of this title comes from an article in the Wall Street Journal about the the regulations put on crypto in the recent infrastructure bill passed by the Senate. I don’t normally go around praising mainstream media outlets for their reporting on crypto, but this article hits the nail on the head and maybe will explain the issues to a larger group of people with the way the US government is going about regulating crypto.
Here is the main point from the article:
Some industry and national-security officials warn that the proposal (regulation in the infrastructure bill) could unintentionally push illicit cryptocurrency transactions into markets where the U.S. government has no reach, adding to the threat to American companies, government agencies and individuals.
In essence, people that understand crypto are trying to tell those in congress they are completely lost on this subject.
Now, I have never been one for the use of crypto to avoid taxes. If you convert your crypto to fiat at a profit, you should pay the associated taxes at your current rate. That is the end of my need for government regulation. Now, I know you might say, well this is all the government is trying to do with this regulation. I would reply it is not just me saying this current bill is an overreach, the WSJ is even saying it. The article continues:
Few dispute the need for disclosure of cryptocurrency transactions as a way to monitor potentially illicit activity. But the bill as written captures corners of the industry not focused on transactions, including everything from miners and stakers to producers of the hardware and software used in crypto markets.
Thus some intelligence and law-enforcement officials are joining industry leaders in warning policy makers against overly aggressive regulations that risk exacerbating national-security hazards.
The problem is congress’s basic misunderstanding of the term decentralized. The bad guys are not limited to the borders of the US, they cannot be controlled by a bill out of Washington DC. This will simply send the bad element further into hiding and therefore, harder to stop.
Education, understanding, training and security measures are the start to ensure the safety of crypto. Governments must understand it first, making rash regulations buried in trillion dollar bills will have a long-lasting and devastating effects.