Crypto buying and mining should be banned, says US Congressman

The crypto market had its attention fixed on Capitol Hill on 18^th July as the U.S. Congressional Subcommittee on Monetary Policy and Trade took up issues concerning digital currencies for discussion.

Congressman Brad Sherman, a California Democrat, has maintained a firm stance against cryptocurrencies since the very start. Back in March he made a fairly controversial remark by calling cryptocurrencies “a crock”. In the hearing of the subcommittee, he vehemently advocated against America’s participation in the cryptocurrency market.

Sherman said “we should prohibit U.S. persons from buying or mining cryptocurrencies.” He justified his stance by saying that cryptocurrency could be used to evade taxes and it can also come in handy for some countries which might attempt to bypass U.S. Sanctions. It is interesting to note here that Sherman’s largest donor is credit card processor Allied Wallet.

While there was a voice trying to keep crypto at bay, there were several other voices in the subcommittee that showed support towards cryptocurrencies and one of them was Norbert Michel’s, who is the director for the Center for Data Analysis at the Heritage Foundation. He shot down Sherman’s attempt to restrict the image of crypto to that of criminal use.

“Yes it is true that criminals have used bitcoin, but it’s also true that criminals have used airplanes, computers and automobiles. We shouldn’t criminalize any of those instruments simply because criminals used them” said Michel.

The parts of the discussion that revolved around crypto in general made it clear that there is barely any support for the idea of a central bank digital currency (CBDC). The idea is to basically use some of the technology behind bitcoin and other cryptocurrencies and integrate it into a new digital monetary system.

At Wednesday’s hearing, Alex Pollock, a senior fellow at the R Street Institute, called it “a terrible idea – one of the worst financial ideas of recent times.”

Amidst more criticism, Dr. Eswar Prasad, who is a senior professor of Trade Policy at Cornell University stated that cryptocurrencies could have a very positive impact on the financial services system. He further went on to add, cryptocurrencies could “make transactions much easier … and bring down the cost,” but it has limited pros for now.

Michel made a statement saying “It is certainly difficult to imagine a cryptocurrency replacing the U.S. dollar as long as the Federal Reserve acts as a moderately good steward of the national currency, but it is for this very reason that Congress should eliminate barriers that impede people from using their preferred medium of exchange.”

The subcommittee could very well take this topic up for discussion once again.