The specifics of how Senator Elizabeth Warren intends to control cryptocurrency have come to light, and they are terrifying on a different level. The adamantly anti-crypto Democrat just unveiled her draft crypto legislation. However, it is rife with glaring flaws that make it very evident that she is ignorant of the underlying technology.
The Financial Crimes Enforcement Network will be obligated by the statute to provide recommendations on digital assets. She wants to consider the sector and asset class as criminal organizations, to put it another way.
A broad range of rules in the “Digital Asset Anti Money Laundering Act of 2022” eliminates fundamental financial privacy. Warren wants to label wallets, nodes, and validators as “money service businesses,” demonstrating a shocking lack of understanding of the technology.
Additionally, those organisations would have to register as financial institutions, just like in traditional finance and banking. As a result, they would have to track down and collect personal data from each user of their product. Additionally, they would be required to report on their users without a court order, official request, or strong evidence. According to Elizabeth Warren, it would also be unlawful for these “Financial Institutions” to conduct any transactions using networks or privacy-enhancing techniques.
Recently the Senator from Massachusetts and a group of six other US senators have asked for data on the energy use and potential environmental effects of Texas-based bitcoin mining facilities. They specifically asked for data on how much electricity Texas’s crypto miners used and how much carbon dioxide they released during the previous five years.
Nevertheless, not all Democrats are opposed to the cryptocurrency sector. Many of them own cryptocurrency and even openly support it. Congressman Tom Emmer (Republican) and Darren Soto (Democrat), recently announced their intention to resubmit the “Blockchain Regulatory Certainty Act” bill. It would remove the requirement that certain cryptocurrency firms and projects register as Virtual Asset Service Providers (VASPs).
Given the current environment, where the U.S. government is rushing to establish legislation to avert another catastrophe along the lines of FTX, Emmer may be feeling more optimistic about his chances this time around.
About “blockchain developers and service providers,” such as miners, multi-signature service providers, and decentralised finance (Defi) platforms, the bill itself wants to establish rules that eliminate some restrictions and requirements.
Emmer has made a point of praising the crypto community for using blockchain technology to unearth crucial information about the firm’s practices, even though several American politicians lambasted cryptocurrency at the House Financial Services Committee hearing on FTX’s collapse this week.
Democrats and Republicans are polarized over crypto regulation, which is not good since mid-term elections have slightly turned in favour of the Democrats. If they want to ban crypto and increase difficulties for firms engaged in crypto, they can do it. However, Democrats who do understand the importance and potential of crypto could stop that from happening.
The United States has controlled world banking ever since the U.S. dollar was established as the global reserve currency following World War II. As a result, Americans now enjoy benefits including higher purchasing power, easier access to cash, and low-interest rates.
In all honesty, the nation’s dominance is being challenged more and more by the digital Yuan, China’s rise, and the national debt. The United States would incur higher interest expenses as a result of losing its status as the world’s reserve currency, as well as higher debt repayment costs and a quickly growing deficit.
Before a crisis develops is always the best time to deal with it, and the US still has time to correct its financial track and put itself ahead of the curve.