How will Bitcoiners regulate the regulators? – Bitcoin Magazine
This is an opinion piece by Niklas Kleinwortha research assistant at the Idaho Freedom Foundation, a think tank for public policy.
While Congress is trying to delineate the federal government’s stance on cryptocurrency, one must be wary of policies that allow favoritism over the interests of bureaucrats over Bitcoiners. Although Bitcoin itself cannot be regulated, federal control can hinder the advancement of orange-peeled nocoiners by making bitcoin less convenient to access and exchange. Bitcoiners should support legislation that both simplifies the industry’s relationship with US authorities and offers protection against bureaucratic handover.
Senators Cynthia Lummis and Kirsten Gillibrand’s cryptocurrency legislation is a long-awaited and celebrated milestone in the industry as it recognizes the role that bitcoin plays in the US economy and offers a regulatory framework for many of the gray areas that have plagued government interactions with business. bitcoin. Among these, the bill will designate the Commodities Futures Trading Commission (CFTC) as the regulatory body for cryptocurrency issues, define bitcoin as a commodity instead of a value, and improve market transparency for stablecoins. This approach could lead to more innovation and greater use of bitcoin as it is used in daily transactions.
Despite the benefits of the bill, Bitcoiners should be skeptical of this new political direction in Washington, DC, as a set of rules is no more restrictive for bureaucratic agencies than the edges of a blank canvas for a painter. The Lummis-Gillibrand bill highlights the creation of this framework, but fails to implement any protection against the very entity that is threatened by the Bitcoin ethos of decentralizing wealth and making fiat obsolete: the federal government. By introducing a regulatory framework without implementing security against bureaucratic overreach, the industry will not be safer after this bill has been passed than it is today. In fact, it can be argued that the industry will be less secure because bureaucrats will be allowed to focus their regulatory efforts on the industry instead of fighting each other for control.
Although Senator Lummis has been discussing the adoption of cryptocurrency legislation for some time now, it seems that the recent pressure for adoption has been driven by investors fleeing to the government for rescue after the liquidation crisis in recent months. Supporters of more regulation are not the everyday HODLers who believe in the principle of decentralized wealth and economic freedom. Rather, the modern gold diggers who are trying to utilize altcoins get rich-quick to expand their wealth in fiat. Nevertheless, their calls for regulation are presented as a consensus from the cryptocurrency industry, which by the way sweeps Bitcoiners into the new regulatory stage despite not being involved in the crisis.
In Bitcoin’s truly untrustworthy system of financial responsibility, there is no need for regulation. Because of this, it is not really necessary to regulate the rest of the cryptocurrency market either. Consumers hate nothing more than being scammed. When altcoin fashions come and go, it becomes clear that bitcoin has perseverance and investors will eventually stop supporting failing, volatile and pseudo-decentralized coins. If there is one thing we have learned in the last two months, it is that Bitcoin is the model for laissez-faire capitalism operating in a self-regulated system.
It is very dangerous to seek the government as the ultimate solution to problems that exist in a free market. Especially when problems were caused by a product’s poor durability that responds to poor market management by the same regulators.
The problem with further regulation of cryptocurrency exchanges is that the authorities will gain more tailored control over the market and restrict economic freedom. This effect is particularly potent as bitcoin integrates with the market by becoming a payment option for the average consumer. Businesses, not bitcoin, will be the target as few of them would be willing to risk the consequences of defying the authorities’ overreach.
Bitcoin is designed to be the escape hatch from the federal government’s poor governance of the market. Currently, historical inflation makes common activities such as driving to work and eating three square meals a day virtually unaffordable. Meanwhile, the Federal Reserve is dangerously close to overcorrecting the situation, threatening to send the economy into a recession that could compete with what we experienced in 2008. Given this track record, it would be unwise to give the current managers of the US economy some control of people’s access to their only means of escape.
Although the Lummis-Gillibrand bill is a start to clarifying the law and recognizing bitcoin as a viable asset store, there must be provisions that protect the industry from regulators themselves. There should be protection that recognizes your right to own and retain your bitcoin, limits the room for maneuver executive agencies have when interpreting their role within the regulatory framework, and recognizes one’s right to financial privacy as guaranteed by the Fourth Amendment to the US Constitution. Regulating regulators will limit the overarching scope and support the rights to financial privacy and property in its most perfect form.
It should be remembered that bitcoin is not meant to be a common investment, but a movement built on the principle that economic freedom should be available to all and absent market manipulation from any government, company, group or individual. Investors who voluntarily request the restriction of this right, hold bitcoin for the wrong reasons and completely miss the point of this great experiment.
Bitcoiners must not just HODL their bitcoin on the basis of their belief that it is a superior value store. They must also apply this principle to the sphere of public policy: “Political HODLING” on the basis that bitcoin does not require any regulation as the superior untrustworthy system it is. It is important to both support public policy that clarifies the law, encourages innovation and opens up the market, while at the same time going against those who create interventions for bureaucrats to regulate according to their own wishes. Without this political vigilance, Bitcoiners are in danger of losing the cultural war between the Fed and real economic freedom.
This is a guest post by Niklas Kleinworth. Expressed opinions are entirely their own and do not necessarily reflect the opinions of BTC Inc. or Bitcoin Magazine.
