During today’s cryptocurrency-related hearing at the Senate Committee on Banking, Housing and Urban Affairs, Republican Senator Mike Crapo spoke positively of Bitcoin and digital currencies.
“It seems to me that digital technology innovations are inevitable, could be beneficial, and I believe that the U.S. should lead in developing these,” he began. “With the appropriate balance of regulation, digital currencies and their innovative underlying technology could provide meaningful benefits.”
The statement is a welcome change from previous discussions from Congress, most of which have painted cryptocurrency in a bad light. The spate of debates come in light of Facebook’s plans to launch a blockchain-based digital currency network called Libra. The social media giants plans have been met with an unusually high degree of concern from regulators and lawmakers in the U.S. and abroad. Until now, the cryptocurrency industry has largely been ignored by most regulatory agencies other than the U.S. Securities and Exchange Commission (SEC).
In the speech, Senator Crapo went on to clarify his feelings that even if the United States wanted to ban cryptocurrency, it would likely fail in doing so. “If the United States decided we didn’t want cryptocurrency to happen in the United States and tried to ban it, I’m pretty confident we couldn’t succeed,” he said, noting that it’s a global innovation.
“But the problem I have with Facebook is that Facebook is in a unique position with over 2.2 billion worldwide users. By having those tentacles everywhere globally, they have the opportunity to be more impactful in countries where there is less stability,” he said.
The positive comments from Senator Crapo don’t necessarily indicate a change in heart from Congress as a whole – but do show an increasing understanding about how cryptocurrency works. The recognition that any attempt to ban cryptocurrencies would only push them further underground may help to better inform regulators about how to proceed with legislation.
While traditional cryptocurrencies like Bitcoin can only ever operate outside of government regulation, large privately-controlled digital currencies like Libra require a degree of regulation to avoid abuses.