Is the Treasury a threat to blockchain and crypto adoption?

Only 3% of the United States Senate attended the Texas Blockchain Summit last week, bringing in concerns from Wyoming Senator Cynthia Lummis.

Lummis spoke at the summit, voicing her concerns about how the government and federal agency views blockchain and cryptocurrency. She said that the United States Treasury might be a bigger threat to how blockchain and digital currencies can be implemented and regulated than the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission. Lummis noted that there might be a skewed perspective of how Bitcoin functions and pointed out that this might have an adverse effect on how lawmakers and regulators approach blockchain-based currencies. She said:

“I’ve worked with members of both parties who didn’t have any interest in Bitcoin and digital assets and now we know each other, and now we talk regularly about this. I do think there will be some changes to that language, but it’s beginning to show a pattern in my mind by the Treasury Department, the IRS, that we’re really going to have to work on keeping the heavy hand of government at bay.”

The biggest concern about the blockchain bill is in the language

One of the main points of contention regarding cryptocurrency as part of the infrastructure bill is the way language is used and how certain definitions might have long-term implications. The word “broker” in particular is being used by those opposed to the bill. As part of the economic recovery plan from the global Covid-19 pandemic, the infrastructure bill will have longer-term economic ramifications that will carry forward in how technology is used and how miners, exchanges, customers, and traders will be able to interact with Bitcoin and cryptocurrency.

Both Lummis and Senator John Cornyn noted that the language used regarding blockchain and cryptocurrencies is worrying. Lummis said her concerns stem from the lack of fundamental understanding and how the federal agency spoke about brokers of cryptocurrencies used in the infrastructure bill that is currently in the midst of debate in congress. Cornyn stated that the language in the bill came as surprise to members in Congress who don’t have enough knowledge to speak with authority on the matter. Both Senators offered that they think the best step to avoid misunderstanding in legislation and how regulation might happen depends on public interaction and engagement with the topic rather than depending on those in the legislation office learning about the technology.  According to Cruz:

“There are not five members of the U.S. Senate who could tell you what Bitcoin is.”

While Lummis might not agree, saying she saw enough understanding proceeding the debate over infrastructure, she also felt as though the language regarding cryptocurrency was likely to be amended in the Bill.

While there is still room for greater state support, other members of Congress have offered their positive sentiment regarding blockchain and crypto use in the country: Treasury Secretary Janet Yellen is in support of cryptocurrency legislation and adoption. During a Senate session, Rob Portman, a Republican from Ohio, said that “cryptocurrency is a digital asset that more and more people are investing in. We should want that to continue, and continue in a healthy and sustainable way”.

Crypto regulation is better than a crypto crackdown

While the United States has been struggling over the latest bill, there is a wealth of support from those who see the value in the decentralised technology. Edward Snowden pointed out that cracking down on the cryptocurrency, in the way that China is doing, for example, leads to a greater rally for the token. Long-term adoption, however, is going to be a hurdle if governments are divided on how Bitcoin can be utilised across the globe.