I do not think I am the only one who has to find Congress and well regulator's ideas and attempts to regulate crypto a little fascinating. Some are either the craziest stupidest things I have ever heard of like banning crypto to decent ideas like putting some guardrails on crypto and building an on-ramp for projects to follow to be compliant over the next few years. This last week or so members of Congress have been pretty active in pitching their ideas but who pitched what? 

Elizabeth Warren

Unable to really gain any traction with her legislative ideas it might sound good to some that Senator Elizabeth Warren is supportive of the US creating and launching a central bank digital currency or CBDC for the US dollar. However, that could not be farther from the truth. A long-time crypto critic Sen. Warren also continues to propose legislation to "wrangle" crypto as she has previously called it. To the average person, this seems really confusing because why would someone who has shown their disdain for something at the same time promote it?! Well, the answer is simple.

To regulate the crap out of it.

See if the Federal Reserve or Treasury Department were to issue a CBDC or Digital Dollar the government would be able to completely control its supply of it. This means that they will be able to apply rules and regulations to not only the blockchain it is on but those that interact with it. Since this CBDC is going to interact with these other blockchains that is where the issues are going to arise as the government tries to exert its influence.

Right now people are realizing how important it is for decentralization. If you are wondering why to look no further than the Axis Infinity hack. This only took place because there were a small number of validator nodes and the hacker got control of over 50% of them. Of the countries with CBDC that I can think of off the top of my head both of them have essentially crushed the crypto/blockchain space in their respective countries. While China took the route of just outright banning them Nigeria effectively suffocated them out of the country. 

The world is 0 for 2 when it comes to the implementation of CBDC and I do not really see this changing too much with what has been proposed. The underlying issue remains and that is the ability to regulate and stifle innovation. Humanity and really the world should always be working to continue to innovate and improve upon itself however CBDC run counter to this and cause most innovation to stop due to red tape. Until this is addressed CBDC will continue to lead to negative outcomes and never live up to the true potential they have.  

Cynthia Lummis 

Another Senator for Congress Cynthia Lummis is gaining bipartisan support for her idea and could possibly have Democratic cosponsors from both the East and West Coasts. This is huge given how often it is that legislation is getting jammed up with the 50/50 split in the Senate right now. While the bill has not been proposed yet the reports state that a variety of issues will be addressed.

The legislation will propose rules that will clarify the role of the SEC and other agencies when it comes to regulating crypto and provide definitions that will state that many popular tokes are not securities. Finally getting to the bottom of the securities debate will settle all of these different lawsuits that the SEC has fired off against different projects including Ripple Labs. This will not only help properly focus the SEC enforcement branch but also clear up the court system.

The most important feature though that will be vital to the legislation having is called a de minimus exemption for crypto transactions of a few hundred dollars or less. This would allow you to pay for goods and services or even transfer funds between different wallets without triggering tax obligations. The current system is confusing and hard for those who are even declaring their crypto holdings can get tripped up with how complex it is. By removing this obstacle more people would be willing to declare their taxes and also just declare them properly if it is something they understand. 

Final Thoughts

While it is expected that members of different parties would have different views and ideas behind revolutionary technology there is an amazingly stark contrast between Sen. Warren and Sen. Lummis. Something I have mentioned before is how poorly the type of crypto regulations the Democratic Party has been pushing polls and given the slime majorities they have upsetting voters is a pretty crazy idea. Since some Democratic members have noticed this like Sen. Ron Wyden of Oregon and Sen. Kirsten Gillibrand of New York they could be the ones who join Lummis and stand up to Sen. Warren and the current SEC Chairman. 

Whatever legislation passes needs to be elastic and able to be shaped and reformed as it is applied so that regulators can watch what it does to the industry. Both sides know that stifling this industry will be a huge setback for America so regulators need to be given definitions and a clear framework that they can then apply rules and regulations. 

Please know I am not a financial advisor I am just someone who picked up on a trend and wanted to express it! Makes sure you always do your own research and never invest money you cannot afford to lose! If you enjoyed this article and would like to further support me below are a couple of referral links that if you used when signing up I would appreciate it! Also, follow me on Twitter @Cje95_

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