The Bitcoin Foundation wants to establish a “more open and diverse dialogue with the U.S. Congress” because it worries that federal legislation will “stifle the adoption and use of so-called ‘virtual currencies’ such as Bitcoin.”
The advocacy group, which envisions “economic participation without a bank account or credit history,” may have reason for concern. Over the past 24 months, several states have implemented cryptocurrency licensing requirements; the SEC issued an ICO alert and Canada responded in kind; China flat out banned initial coin offerings.
Bitcoin Foundation Worried About Excessive and Early Regulations
In response to officials’ regulatory knee-jerks, the Bitcoin Foundation partnered with a law firm to “fight against increasing federal and state regulation in the U.S.”
Below are excerpts from the Bitcoin Foundation’s announcement, plus comments by Llew Claasen — one of the foundation’s principals — about why over-burdening the burgeoning blockchain industry is bad news.
On Over-regulating Crypto and Fintech Startups: “The increased regulatory push by federal and state authorities, if it continues, is sure to threaten the existence of the fintech industry nationwide.”
On New York’s Bitlicense Law: “Just as the fintech industry’s use of cryptocurrency was stifled in New York by the adoption of the so-called Bitlicence, it is highly likely that increased regulatory and legislative burdens [placed upon Bitcoin] will have a similar negative impact.”
On Industry Uncertainty: “[The Bitcoin Foundation’s] view is that it is not yet clear what bitcoin and cryptocurrencies are. But by regulating the technology prematurely, you put it into a box it might not fit into later on. It’s not that we don’t believe there’s a time and place to regulate Bitcoin, we’re just saying that it’s too early and that regulation will just do harm to very innovative businesses and technologies.”
On Criminals Using Cryptocurrencies: “Reports by the European commission in June specifically found that there is very little of that activity, particularly there is very little terrorist funding and money laundering. Bitcoin is too hard for criminals to use at the moment. It’s easier for a criminal to use the United States dollar.”
On Bitcoin’s Usefulness: “Bitcoin has the potential to be a store of value that’s outside the control of central banks. In the future, we would like to see more adoption of Bitcoin. It’s not going to be the only currency, and it won’t replace the current system, but among other options it’s a useful case for the future.”
On Bitcoin’s Current Limitations: “It’s immature technology. There is a perception that it allows unlimited transfer of value, but it can only do three or four transfers a second. The network cannot handle larger transactions. “
On Delaying Cryptocurrency Regulations: “I understand that regulators need to protect the currency and people from risk. [In the future] regulators will probably regulate at the end points of the cryptocurrency network. I get that, it’s inevitable. Around the world the view is the same. But governments and financial services are already struggling, as in Venezuela, and people need an alternative way.”
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Nixon, M. (2017, August 30). Bitcoin Foundation seeks legal protection from US currency regulation. Retrieved September 28, 2017, from http://www.independent.co.uk/news/business/news/bitcoin-foundation-legal-protection-us-currency-regulation-llew-claasen-cryptocurrency-bitlicence-a7919401.html