During the Wednesday hearing of a subcommittee for the House of Representatives Financial Services Committee, congressman Brad Sherman advocated keeping Americans out of the crypto market entirely.
“We should prohibit U.S. persons from buying or mining cryptocurrencies,” – the California Democrat declared.
He added that, beyond cryptocurrencies being potentially used as a form of money in the future, it can currently be used by tax evaders and rogue states seeking to bypass U.S. sanctions.
Norbert Michel, director for the Center for Data Analysis at the Heritage Foundation, pushed back against the idea that criminal use should define cryptocurrencies as a whole.
“Yes it is true that criminals have used bitcoin, but it’s also true that criminals have used airplanes, computers and automobiles. We shouldn’t criminalize any of those instruments simply because criminals used them”, – said Michel.
Though much of the hearing revolved around general monetary policy and history, the crypto-specific portions revealed a general opposition to the idea of a central bank digital currency (CBDC).
A number of central banks around the world have been investigating the idea of using some of the technology concepts behind cryptocurrencies as part of new, wholly digital money systems. The idea is that the tech can boost transparency and efficiency.
But some of those looking into the subject have warned that it could amplify the risk of bank runs, and several institutions have sworn off the idea entirely following their research.
Dr. Eswar Prasad, senior professor of Trade Policy at Cornell University, argued that the existence of cryptocurrencies had the potential to impact the financial services system, particularly the payments system, in positive ways.
He said that cryptocurrencies could “make transactions much easier … and bring down the cost,” but the benefits are limited at the moment.
Norbert Michel noted:
“It is certainly difficult to imagine a cryptocurrency replacing the U.S. dollar as long as the Federal Reserve acts as a moderately good steward of the national currency, but it is for this very reason that Congress should eliminate barriers that impede people from using their preferred medium of exchange.”
Chairman Andy Barr noted that cryptocurrencies will continue to have a greater and greater impact on the financial system of the USA making it a topic the committee would likely have to “revisit” once again.