Congressional crypto regulations needed to slow innovation exodus

US lawmakers have reintroduced a bill to prevent an innovation exodus in the wake of an ongoing encryption crackdown on the industry.

A bipartisan effort to sustain innovation in America has been revived by pro-crypto politicians.

Crypto Regulation Battlefield

The Keep Innovation in America Act was first introduced in March 2021. However, it has been reintroduced in the wake of the regulatory war against crypto that threatens to send talent overseas.

Representatives Patrick McHenry and Ritchie Torres revived the bill this week to fix digital asset reporting requirements.

On March 10, Coinbase CEO Brian Armstrong tweeted the news, commenting:

“We are grateful that this is a bipartisan effort, and we hope it is the first of many bills to come this year that will protect consumers and bring clarity to the crypto regulatory environment.”

Innovation will leave America

Earlier this week, the chairman of the House Financial Services Committee gave McHenry a stark warning. He said America could either cement its position as the leader of the global financial system, or it could let this wave of innovation pass.

The bill aims to change the reporting requirements for crypto industry participants under current legislation. As it stands, the current law would “impede the development of digital assets and their underlying technology in the United States, and shift development outside the United States.” McHenry added:

“Unfortunately, misguided policies and regulatory overreach threaten to push this dynamic industry – and its potential benefits – overseas.”

Ritchie Torres echoed the sentiment, saying:

“This common sense legislation, which has earned the support of key industry and market players, brings digital asset reporting requirements into line with today’s ecosystem and offers much-needed legal and regulatory clarity to help cement our continued place as a global leader in crypto technology and innovation.”

The bill has also received support from both sides of the political divide. Co-signatories include Congressmen Warren Davidson, Tom Emmer, Eric Swalwell, Ro Khanna and Darren Soto. In addition, the chair of the Digital Assets and Fintech Subcommittee French Hill gave his support.

In 2021, the Biden administration introduced a bill that set extensive reporting requirements for any entity involved in crypto.

Resistance to war on crypto mongering

Furthermore, several high-profile industry leaders have repeated the exodus warnings in the past week. The concern is growing in the wake of the ongoing war on crypto by the SEC, which is on a mission to stop the industry before it can flourish.

In addition to Brian Armstrong, Circle CEO Jeremy Allaire and Ripple CEO Brad Garlinghouse have also warned of an innovation flight.

Coinbase Chief Legal Officer Paul Grewal is too preparing to testify on Capitol Hill on March 10, echoing the sentiment.