Titles listed for identification purposes only.
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The introduction of the first decentralized peer-to-peer payment system, Bitcoin, has led to the creation of a novel and booming set of payment services- known collectively as “cryptocurrencies” (researchgate.net). These digital currencies are not created by any government nor does any one individual have complete control over them. Consequently, these cryptocurrencies have become an integral part of today’s digital economy.
As a firm supporter of tech innovation, I believe that we not only have a responsibility to cultivate this new technology but we also have a responsibility to integrate it into our society. Numerous benefits have already sprouted from cryptocurrency such as user autonomy, protection from inflation, accessibility and, most importantly, a massive reduction in economic inefficiencies (cnn.org, fas.org). In order to further adopt cryptocurrencies in our financial system, we should allow taxes and fees to be paid to government agencies in virtual currency. Some states such as Florida and Ohio have already adopted this proposal and if adopted federally, would go a long way to facilitate the utilization of cryptocurrencies as a widely used payment method. After implementing this proposal, I support making Bitcoin legal tender, paving the way for wider acceptance of cryptocurrencies in a rapidly digitizing world. These proposals will magnify the previously mentioned benefits of cryptocurrencies for our financial system and modernize our economy.
It’s clear that cryptocurrencies and digital assets have grown exponentially in recent years to represent a large amount of value and economic activity. This quick growth, however, has far outpaced the government’s ability to respond. A national framework for regulating these digital assets has failed to emerge, with several federal agencies claiming conflicting jurisdictions (brookings.edu). If elected to Congress, I will promote legislation that clarifies and establishes a uniform regulatory framework for cryptocurrency markets in the United States.
Technological innovation is an issue that transcends the partisan divide and as such, I support the efforts of bipartisan actors in Congress to establish an interagency task force with the purpose of researching financial crimes and terrorism with regards to cryptocurrency then developing regulatory and legislative proposals to counter those illegal activities (rollcall.com). I am a firm believer in the idea that the government should play a decisive role in driving innovation, not hindering it. As such, the goal of any legislation or regulation should be to (1) clarify the regulatory obligations for innovators to ensure market integrity and consumer protection, and (2) ensure that these obligations are not so burdensome as to stifle innovation. As a result, I support the bipartisan attempts made in the 116th Congress to exempt blockchain developers and providers of blockchain services from certain financial reporting and licensing requirements that would unnecessarily burden rising entrepreneurship (HR 528). Specifically, the act would confirm that blockchain innovators who do not take control of consumer funds, do not need to register as a money transmitter. Examples of these entities include "miners" that validate network integrity and multi-signature providers that provide enhanced asset security to users. The benefits that cryptocurrency can provide to our economy are immense. While we are recovering from one of the worst economic crises in recent history, we should be doing as much as possible to incentivize innovation and this cannot occur until we implement laws that foster growth rather than suppress it.
In addition, I am dedicated to tackling the other obstacles standing in the way of this rapidly growing technological innovation. One serious obstacle proposed by FinCen (Financial Crimes Enforcement Network) in December 2020 would force cryptocurrency exchanges to keep records on all cryptocurrency transactions to and from self-hosted wallets over $3,000, and automatically report all transactions involving self-hosted wallets over $10,000 to FinCEN. Financial data reveals some of our most sensitive personal information, including our personal interests, the causes we support, and our plans for the future. I consider these proposed changes and those similar to it to be an assault on our right to privacy and a burdensome regulation that would do much more harm than good (nclalegal.org). I believe that such an invasion of privacy by the government is a serious violation of our constitutional rights and should be curtailed with prejudice. I am committed to protecting your individual right to privacy and I strictly oppose this proposal as well as others like it that would jeopardize your civil liberties.
Another serious obstacle hindering the growth of cryptocurrency is the capital gains tax. I fully support a limited-time moratorium on the capital gains tax on cryptocurrency to ensure that this thriving innovation can progress unburdened. Consequently, I am against efforts made by the Biden Administration to raise this particular tax at this time because I believe that taxing cryptocurrency heavily stifles tech entrepreneurship and thus, leads to a loss of potential economic activity. Empirical studies have shown that capital gains creates an additional level of taxation on successful entrepreneurs. Consequently, the asymmetric taxation where gains are taxed more heavily than losses discourages risk taking. One major problem is that capital gains rates can lock in entrepreneurs, preventing the sale of assets to more efficient managers (accf.org). This is especially important as the US has seen a decline in the formation of new companies, worker flows, and job creation and destruction. Many economists note that this is a “worrisome trend because an important driver of productivity growth is the reallocation of resources from less productive to more productive firms” (brookings.edu). Thus, in order to ensure cryptocurrency grows and entrepreneurship progresses, the capital gains tax on cryptocurrency must be temporarily suspended until this vital technology can further develop.
Cryptocurrency is the future of finance. The tech innovations pushed forward by this country and especially this district have made the possibilities of cryptocurrency limitless. If elected to be your representative, I will be wholly committed to ensuring that our district and our nation remain at the forefront of the world technological stage.