Why A Congressman Seeks A Blanket Ban On Cryptocurrency?
A United States Congressman, Brad Sherman, has sought a complete ban on any activities relating to cryptocurrency. He is known to make such controversial comments on the digital currency subject in the past too. Therefore, his comments during the subcommittee’s hearing have not surprised anyone. However, his statements came at a time when the virtual currency sector is seeing some kind of reversal of fortunes. This was evident when at least five of the top ten digital coins generated double-digit growth in the one-week period.
Out of the Market
The government has established a subcommittee meant specifically for the House of Representatives Financial Services Committee. During the hearing, Sherman has gone to the extent of encouraging the country’s citizens to be totally out of the cryptocurrency market. This included either mining of digital coins or buying any of the virtual assets. He believes that cryptocurrencies are being used as a tool to evade taxes and that some of the states are using it as a tool to buck the sanctions slapped by America.
However, he appears to have admitted that there is potential for digital currencies to be accepted as a kind of money in the upcoming periods. Significantly, Center for Data Analysis center director and a panelist, Norbert Michael, has put a strong defense against the idea of criminalizing the digital coins completely. He admitted to the committee that criminals are using bitcoin or any other virtual asset. He also noted that criminals are using other modes too like computers or airplanes or automobiles.
Therefore, he has urged the committee not to criminalize any of the instruments just because cryptos are landing at the hands of criminals. Michael termed these components as the main barriers to hinder the extensive adoption of the virtual assets in the country. During the hearing, there was general opposition to any idea of a central bank-supported cryptocurrency through the committee focused on general monetary policy most of the time.
Though some of the country’s banking regulator showed some interests in the sector initially, it has waned after their research, Coindesk reported. That is primarily due to risks attached to running banks around the world. R Street Institute’s senior fellow, Alex Pollock, has not only termed it a “terrible idea” but also one of the worst ideas in the financial sector in the recent past.
Most of the committee members have also seemed to have agreed that there were some fundamental questions as to how the digital coins and its platform, blockchain technology, work. For instance, a congressman, Bill Foster, is not convinced about the technology and cited unresolved issues to defend his opinion.
On the other hand, Cornell University’s senior professor of Trade Policy, Eswar Prasad, thinks that cryptos could impact the financial services system especially the payment systems. He believes that digital coins will enable transactions to be both easier and cost effective. However, the gains are restricted currently. Before winding up, Andy Barr, chairman, indicated that the committee would not mind in revisiting the topic since he believes crypto will impact financial system.