Current Crypto Regulatory Stalemate Gives Bitcoin Lobbyists a Chance to Influence Lawmaker Policies
Crypto Lobbyists In Washington
One of the main impediments to bitcoin’s growth is the regulatory scheme. Most of the regulation is aimed at preventing the use of cryptocurrencies as a mechanism for fraud. As a result, many current holders and investors are concerned that it could be vanned altogether. On a global scale, there are intentions to create a global regulatory framework for crypto assets and blockchain technology, although there is no indication as to what this could look like.
In the United States, lobbyists are currently pushing to influence how crypto laws evolve and are looking to establish a favorable environment.
Coinbase Establishes Lobbying Group
Coinbase took action into its own hands in July by establishing a political action committee (PAC). The purpose of the committee is to lobby for bitcoin. Like all PACS, its purpose is to raise and spend money for the political agenda behind it. Further, PACS are recognized as a means to support labor, business, ideologists, and so much more.
There are also two types of PACS, connected and non-connected. The former affiliate themselves with interest groups that share the same interests, while the latter lobby for one specific issue. Coinbase is also not new to its involvement with PACs. In an interview on CNN in 2014, the platform donated $3,000 to BitPac.
Bitcoin Lobbies As Well
Bitcoin has also created its own lobbying group to promote legislation favorable to cryptocurrencies. Four years ago, the platform hired Thorsen French Advocacy, a well-known Washington, DC-based firm and tasked it with introducing to lawmakers the benefits of decentralized digital currencies. According to Jon Matonis, Bitcoin’s founder,
“When governments are properly informed about bitcoin’s bitcoin’s promise, the technology’s social and economic benefits are recognized and its rapid innovation and adoption will increase.”
Jim Harper, Bitcoin Foundation’s global policy counsel-member stated
“The goal is to clear the decks, clear the way, so that the bitcoin community, business and people can build the services, expand out to more and more people the world over, and really deliver on the benefits that bitcoin promises.”
Brett Stapper, the founder of crypto investment funds Falcon Global Capital, has also filed paperwork to lobby on behalf of crypto.
Stapper expressed his concern about legislators’ tendencies to pass legislation without being fully educated on the topic. According to Stapper,
“[the legislation] could have a negative impact on the Bitcoin ecosystem” and “Our goal is to educate these elected officials and to offer them guidance on how to accept Bitcoin contributions. If we can be successful with these efforts, we fill the Bitcoin ecosystem could be greatly impacted.”
Such efforts, it seems, may have led to some headway. In 2017, two state legislators established the Congressional Blockchain Caucus, a bipartisan lobbying group, that works to educate and engage lawmakers to promote the establishment of a smart regulatory approach to blockchain-based technologies. According to Jared Policy, the Colorado democrat part of the initiative,
“Open blockchain networks and distributed ledger technologies are still new, but it’s critical for members of Congress to begin comprehending both their current applications and future use cases. It is critically important the United States remain competitive regarding emerging technologies, and distributed ledger technology is the open, secure, and efficient technology backbone we’ve been looking for.”
Will Lobbyists Succeed In Shaping Regulation?
The final question that arises is whether Bitcoin lobbyists will be successful in shaping regulation. At this point, the entities regulating the arena are the SEC and CFTC. On the other hand, lawmakers have been taking a marginal stance that involves focusing on collecting information and opinions about the industry before they prompt new legislation.
At this point, it seems the policymakers are more keen on waiting to determine how the cryptocurrency ecosystem evolves and to take a hands-off stance. Further, for now, financial regulatory bodies are in charge.
At the state level, things seem to be a bit different. Nevada passed legislation that bans blockchain taxes, while Arizona and Tennessee legally recognize smart contracts. However, not all states are receptive. For instance, Hawaii businesses are prohibited from transmitting bitcoins, while West Virginia banned the use of digital currencies. It is clear that there is no overarching approach and maybe lobbyists will be able to change attitudes.