Where the US government went wrong in regulating crypto

“If you’re not upset…you’re not paying attention…” I haven’t used this phrase since an American president separated children from their parents, but it’s time to break it out again.

As a former government employee, I believe there is a role for government in overseeing the cryptocurrency industry. However, recent regulatory announcements – including directives from the US Federal Reserve and the executive branch designed to discourage crypto firms, an ongoing lawsuit against the largest and most trusted US exchange, Coinbase, and increasingly hostile rhetoric from Congress – are far from appropriate.

Keiko Yoshino is the CEO of the Puerto Rico Blockchain Trade Association.

President Joe Biden’s annual “Economic Report,” published Monday, was a not-so-subtle declaration of how his administration views cryptocurrency. Coupled with the Federal Deposit Insurance Corporation going after Signature Bank because it had crypto assets, it’s nothing short of an abuse of power.

In 2008, the U.S. Treasury Department spent approximately $245 billion to stabilize (also called rescuing) banking institutions. As a result, we printed money, which created inflation and triggered a recession. I was one of thousands, during the great financial crisis, who could not find a job after graduation and moved home before I went to high school. This yer looks to be more of the same. Last week, the Fed added $300 billion to its balance sheet, bringing total debt to $8.6 trillion.

Crypto was not only born out of the financial crisis, but has emerged as an alternative. Why do I use crypto? Because the dollar is inflationary. Full stop. In Puerto Rico, eggs currently cost $7.50 a dozen, and it’s only a matter of time before the price goes to $10. That alone should be reason enough to explore other forms of currency.

There are a dozen other reasons “why crypto” and twice as many misinformed reasons being shopped around by banks and the government as to why it should be separated from the existing financial system.

But let’s just pretend there was an alternative currency that was resistant to inflation, could be stored safely on our phone and sent to anyone at any time with no fee. Wouldn’t that be something worth exploring? I think so.

Change is difficult. But making the same mistakes over and over again is worse. We have lived through the consequences of putting our savings in banks and being wiped out in 2008. I’m not saying that crypto will become the official currency tomorrow, but we shouldn’t wage a war against it. We shouldn’t discourage banks from holding it or people from buying it if they want to. We should not stifle innovation.

Benjamin Franklin said, “Those who would give up essential liberty, to purchase a little temporary security, deserve neither liberty nor security.”

You don’t even have to own crypto to be upset about the predictable cyclical inflation we’re heading back into or government attempts to censor an industry. You just have to pay attention.