Just finished reviewing Biden’s Executive Order on Digital Assets… Here are a few thoughts:
As expected, this Executive Order directs various federal agencies to study benefits and risks of digital assets to our economy/global competitiveness and provide legislative recommendations.
Crypto, tokenization, blockchain, NFTs, smart contracts, & stablecoins are powering a more viable economic structure with individual autonomy. As a country, it’s imperative that we develop a strategy to foster this innovation.
(The @BlockCaucus has been advancing a pro-crypto legislative and oversight agenda for the past 8 years.)
Sec. 1 findings of the EO are sound: We have a national interest in fostering digital asset innovation. The rest of the EO focuses on consumer protection, systemic risks, global competitiveness, international standards, and placing guardrails on code to make sure its resilient.
Now, let’s read between the lines:
1) Decentralization is the Point: The EO doesn’t mention decentralization once. The disintermediation of our economy will enable all Americans, regardless of circumstance, to decide their futures, not a bank or Big Tech or the government.
Given this Admin’s regulatory posture toward the crypto community, we have no reason to assume that the directives in the EO will yield results that appropriately acknowledge the importance of leading w. digital asset policies that prioritize open, permissionless, & private tech.
2) The EO places the “highest urgency” on the agencies to study CBDCs. Any commonsense analysis of a potential U.S. CBDC that is not open, permissionless, and private would illuminate that the very idea is an entire nonstarter and a disservice to Americans.
3) Most fortunately, the EO doesn’t ask the SEC to weigh in. SEC Chair Gensler has spent the past year intimidating crypto innovators and entrepreneurs with his unproductive regulation by public statement and enforcement action. His input is not critical.
Overall, it’s critical that we maintain tech and economic leadership on the global stage and I look forward to continuing to work to find bipartisan solutions to keep our great crypto community right here in the United States.
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Today, I introduced a bill prohibiting the Fed from issuing a central bank digital currency directly to individuals. Here’s why it matters:
As other countries, like China, develop CBDCs that fundamentally omit the benefits and protections of cash, it is more important than ever to ensure the United States’ digital currency policy protects financial privacy, maintains the dollar’s dominance, and cultivates innovation.
CBDCs that fail to adhere to these three basic principles could enable an entity like the Federal Reserve to mobilize itself into a retail bank, collect personally identifiable information on users, and track their transactions indefinitely.
I've been co-leading the bipartisan Blockchain Caucus with @RepDarrenSoto. As 2021 wraps up, I wanted to update you on the Caucus, my work and what we need to accomplish in 2022 to support crypto and web3 innovation in the US.
Let's start with the different actors on the Hill moving crypto policy:
1. @BlockCaucus: We're a group of 40+ Republicans & Democrats who work together to advance a commonsense regulatory approach for web3. The Caucus's support has become instrumental to advancing web3 policy.
2. @FinancialCmte: Congress can't ignore crypto anymore. @PatrickMcHenry prioritized crypto policy for Republicans on the Committee. Maxine Waters, the Chair, followed suit to some degree, but Ds typically lean skeptical for investor protection and environmental reasons.
.@GaryGensler thinks that most cryptocurrencies are securities. Let’s indulge his line of thinking for a moment just so we can see how harmful it is to everyday investors.
Let’s say someone who issued a token agrees with Chairman Gensler wants to register it as a security with the SEC. Once registered, can this token trade on the NYSE or NASDAQ? No.
Can a broker-dealer like Charles Schwab deal in a digital asset that has gone through SEC registration? Would they be able to trade these digital asset securities and custody them? No.