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 was recently signed into law in December 2021 in the form of a small provision contained within the Bipartisan Infrastructure Framework (BIF). The crypto tax provision in the BIF was a change to the tax code definition of a broker, effectively changing the entities that are required to do IRS reporting and submit Form 1099 annually. Consequently, every single market actor who is involved in the process of facilitating transfers of digital assets could be required to identify the users who they are facilitating transfers for and then report that information to the IRS. In addition, any business or person conducting business that receives more than $10,000 in digital assets to verify the sender’s personal information, including their social security number, and sign and submit IRS form 8300 to the government within 15 days. 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 this ill-considered legislation to be an assault on our right to privacy and a burdensome regulation that would do much more harm than good (eff.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 provision as well as others like it that would jeopardize your civil liberties.
Recently, bipartisan legislators have introduced various solutions in an effort to alleviate the harms presented by the crypto provision in the Infrastructure Investment and Jobs Act. Among these solutions was the Keep Innovation in America Act (H.R. 6006). The Keep Innovation in America Act would effectively remedy the reporting requirements for crypto brokers and ensure that cryptocurrency investors would be able to comply with sound standards. I wholeheartedly support this proposal and call upon lawmakers on both sides of the aisle to support this essential legislation to ensure that the American crypto industry remains strong. However, while Representative Ro Khanna (CA-17) has gone to the extent of cosponsoring this bill, incumbent Anna Eshoo (CA-16) has failed to support the bill in any manner. Keeping in mind that both of these lawmakers represent parts of the world renowned Silicon Valley, a fundamental question arises as to why Anna Eshoo has not translated her public support for tech innovation and cryptocurrency into legislative action?
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.
Web 3 is the third generation of the internet. It is a group of technologies that encompasses blockchain, cryptographic protocols, digital assets, decentralized finance and social platforms, NFTs, and DAOs. These systems build on existing internet infrastructure and leverage the power of cryptography to distribute power, resources, returns, and information across stakeholders. The fact that they are distributed and cryptographically secured gives rise to a host of new characteristics that have the potential to fix many of our existing institutions.
Web 3 systems offer a better vision for how societies should use technology. Open, distributed technology platforms that are directly accountable to their users provide an alternative to a digital status quo that is dominated by big tech and subject to exploitation by potentially oppressive regimes and malicious non-state actors.
Decentralization is the organizing principle of our past and future success. Decentralized competition was at the foundation of American growth and dynamism in the 20th century when it helped the country outcompete authoritarian adversaries. It can help us succeed in the face of new challenges today. Decentralization fosters democratized technology platforms that embody the values of open societies and will provide the infrastructure to power tomorrow’s economy and institutions.
Policymakers should work with market actors to unlock the potential of Web 3 technologies and design regulatory frameworks that are carefully calibrated to address perceived risks. America’s technological and financial leadership depends on developing world-class systems that support better payments, digital identity management, data protection, and broader access to opportunity. Those systems will emerge from public-private collaboration, sensible regulation, and standards that are tailored to the different levels of risk inherent in different sectors and projects. If elected, this will be of the utmost importance to me.
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.