Urging for Comprehensive Crypto Legislation

On Friday, Maryland Delegate Adrian Boafo (D) and New York Assemblyman Clyde Vanel (D) sent a joint letter to Democratic Congressional leaders urging them to pass comprehensive crypto legislation at the federal level.

In the letter, the elected officials cited New York State as being a leader in crypto regulation and proposed that New York’s BitLicense be used as a model for what federal crypto regulation should look like. The letter’s authors also noted that New York State has placed a two-year moratorium on proof-of-work cryptocurrency mining that uses fossil fuels, suggesting this could be another consideration for the federal government.

After reading their points, I realized that Democrats can propose Bitcoin and crypto policy ideas that are quite flawed compared to earlier proposals, such as former Vice President Harris’s idea for a regulatory framework that protects specific demographics investing in digital assets.

While I support a regulatory framework that protects all individuals against discrimination, including various racial and gender identities, it is essential for me to explain why a similar approach to New York’s BitLicense and a federal mining moratorium would not be beneficial for the crypto industry.

The BitLicense

New York State mandates that all virtual currency businesses obtain a BitLicense to operate legally within the state.

While obtaining a license might seem innocuous, it often takes months or even years to comply with all requirements, costing upwards of $100,000. This extensive process discourages established firms and startups from even beginning, leading to limited options for New York State residents regarding credible platforms like Strike, River, Swan, and Kraken, among others.

Consequently, New York residents are often confronted with messages stating that certain exchanges do not serve them due to regulatory barriers, creating a frustrating experience.

Implementing a federal BitLicense would suppress innovation and entrepreneurship, creating barriers for companies that could afford the licensing process and ultimately contributing to a less competitive industry overall. Such measures would hinder the U.S.’s goal to become a Bitcoin superpower and cryptocurrency capital.

The Mining Moratorium

While acknowledging the environmental concerns associated with fossil fuel, I understand the importance of job creation and the need for industries to thrive. Many areas in upstate New York have faced economic decline, and the Bitcoin mining sector could provide the necessary revitalization.

Bitcoin mining companies could initially rely on fossil fuels but would be incentivized to transition to renewable energy. If state lawmakers genuinely cared about reducing fossil fuel usage, they would implement broader regulations beyond targeting Bitcoin mining, including action against all fossil fuel-consuming companies. The mining moratorium seems largely performative rather than an effective strategy.

Additionally, a federal mining moratorium would not only negatively impact American jobs but also shift mining activities to countries relying on fossil fuels.

A Request to Democrats

I urge lawmakers to stop introducing regulations that could harm an industry capable of offering quality jobs to Americans. Influential Democrats like Delegate Boafo and Assemblyman Vanel echo outdated views that stifle progress in an important and burgeoning sector.

Instead, they should take guidance from progressive leaders like Congressman Ro Khanna, Congressman Ritchie Torres, and former Congressman Wiley Nickel, who advocate for Bitcoin’s success in the U.S.

This article “Democrats Propose More Bad Bitcoin And Crypto Regulation” first appeared on Bitcoin Magazine and is authored by Frank Corva.