Recently, the US Congress held an event entitled “Legislating Certainty for Cryptocurrencies” which turned out to be a roundtable discussion with experts from the crypto, technology, blockchain, and traditional finance sectors. The lobbying efforts pushed forward by some of the nation’s key crypto players can possibly create a significant development in the blockchain and virtual currency picture of the United States.
Rep. Warren Davidson asserts, “Your input is critical to helping us preempt a heavy-handed regulatory approach that could stall innovation and kill the U.S. ICO market.” With such acknowledgement coming from the Congress, can we assume that the United States of America may finally become a safe haven for blockchain technology developers and digital currency investors?
Rep. Davidson even went further by saying, “With a thoughtful, bipartisan approach that protects consumers, advances free market solutions and defines safe-harbors for the early stage innovators, Congress can send a powerful message around the world that the U.S. is the best destination for ICO markets.” His pronouncement seems to be asking us to expect friendlier policies towards businesses that are engaged in the blockchain technology.
However, the current status of cryptocurrency use, application, and investment still looks hazy in the country. There remains to be vague policies and confusing remarks concerning the regulation of entities that use digital currencies for their transactions. Even the departments within the Federal State consistently fail to have a unified voice with regard the taxation, regulation, and financial characterization of virtual currencies.
For instance, the SEC proclaims that most cryptocurrencies shall be considered as securities even when there is no explicit law stating that digital coins shall be under such category. They even implement harsh penalties to startups that are involved in initial coin offerings and other blockchain businesses that fail to register with them. The unclear and unfair treatment of the US SEC on ICOs and cryptocurrencies in general have led David Forman, chief legal officer of Fidelity Investments to assert, “If the rules are unclear, unwritten, or unknown it’s not appropriate to punish people for making the wrong guess.”
We all know that cryptocurrency is a technological product of the present era. We no longer have the same financial landscape today as how it had been more than seventy years ago when the securities law had been passed. It would truly be devastating to apply a decades-old policy to something that has only been developed recently.
Because of the chaotic regulation landscape of the US on the industry, crypto investors and blockchain innovators have asked the Congress to rush on creating an acceptable regulatory framework that would allow for the growth of the blockchain and cryptocurrency industry in the country.
As Joyce Lai, a lawyer to the Consensys blockchain software technology company affirms, “The competition around the world is real. But there’s still time and opportunity for the US to be a leader here.” Indeed, we have heard considerable blockchain developments in countries such as Denmark, Sweden, and Japan. Even China, a country that bans any kind of transaction in cryptocurrencies, is taking progressive steps toward the use of blockchain technology for economic growth and governmental operations.
Up to now, there is not a single law in the US that appropriately responds to the blockchain and crypto industry needs. Despite the promising benefits of blockchain to a lot of aspects in the economy and society, there are still some dominant figures who resist the continuation and progress of blockchain in the country. A lot of businesses such as Kraken have also been forcibly moved out of the New York State because of the state’s restrictive implementation of the BitLicense policy.
According to Jesse Powell, a key leader of the crypto exchange site Kraken, most US crypto and blockchain companies are now nearly left out by businesses based on other jurisdictions. This primarily stems from the unclear policies concerning the industry and the crackdown of different departments on transactions involving crypto. Even the growth of the investing populace is stifled because they are unable to significantly invest on global blockchain companies.
Can the US still recover from the global exodus of blockchain innovators out of the country? Can Lai be correct in asserting that there is still time for the US to be a leader in the crypto world?One thing is categorically true – there has to be an environment of certainty in order to promote the growth and sustainability of any kind of business. Surely, the United States of America shall not be left out by such a revolutionary technology that can positively change the financial industry and improve the lives of everyone. Can we depend on our legislators to protect the interest of the great majority? We will see in the coming days.
Image from: CNBC