With the beginning of 2022, the United States is about to usher in the first anniversary of Joe Biden’s presidency.After the ambitious start of the tenure, the past few months have witnessed the overall health of the U.S. economy, the government’s handling of the COVID-19 pandemic, and the great work surrounding Biden-the $1.7 trillion “Rebuild Better The tense debate Infrastructure legislation plan.

But even if the Democratic Party’s ability to maintain indivisible power after the 2022 midterm elections may raise suspicion, the party’s general view of cryptocurrency is stronger than ever. The current president’s political party will set the tone for regulatory discussions for at least three years, so it is necessary to conduct a comprehensive review of the basic premise and potential direction of its emerging cryptocurrency stance.

Narrative arc

Over the past three years, the way mainstream Democrats think about cryptocurrencies has been perfectly captured by an anecdote, including Clinton’s two public statements related to cryptocurrencies. One is Bill Clinton, the 42nd President of the United States, who was 72 years old at the time. He said at the Ripple inflation conference in October 2018, The “arrangement and possibilities” of the blockchain are “surprisingly good”.

Three years later, Bill’s wife and former presidential candidate Hillary Clinton spoke at the Bloomberg New Economic Forum in Singapore. Although they called cryptocurrencies an “interesting” technology, they warned that they could weaken the U.S. dollar and destabilize the country. strength–“Maybe start small, but much larger. “

This startling divergence of opinions within the power couple reflects the recent evolution of the Democratic Party itself—from the “third way”, the centrist that was friendly to business, technology, and finance in the 1990s, to the newly discovered high-level emphasis on redistributive justice. Nationalism and large government projects. By current standards, the former first lady sounds quite balanced compared to her party’s comrade Senator Elizabeth Warren. Slamming the crypto market After the volatility broke out in early September:

Proponents say that the crypto market is all about financial inclusion, but the most economically vulnerable are the ones most likely to withdraw funds the fastest when the market drops. […] For those who are not wealthy, high and unpredictable fees can make crypto transactions very dangerous.

Warren has repeatedly condemned cryptocurrency, calling it “Four-stream substitutes for real money” That is”Not suitable as a medium of exchange;” One”Bad investment,” means “no consumer protection;” and tools that make many illegal activities easier.

Beyond Senator Warren

Senator Sherrod Brown also has this negative sentiment to a large extent, which is even more disturbing given his status as the chairman of the US Senate Committee on Banking, Housing and Urban Affairs. Brown’s opening speech at a congressional hearing has never been friendly to cryptocurrencies. Their overall spirit can be summarized as an introduction: Open The July hearing was titled “Cryptocurrencies: What are they good for?”

All these currencies have one thing in common-they are not real U.S. dollars, and they are not backed by the full trust and credit of the United States. […] This means that they all put the hard-earned money of Americans at risk.

Brown accused “a cottage industry of decentralized financial planning” for trying to create “a parallel financial system with no rules, no supervision, and no restrictions”, calling it “a shady, decentralized online funny currency network” without any democracy or transparent.Legislators have repeatedly rejected the idea that cryptocurrencies can replace traditional currencies – the last time was December Congressional Hearing:

Stablecoins and crypto markets are not actually substitutes for our banking system. […] They are a mirror of the same broken system-there are fewer responsibilities and no rules at all.

However, this is not all dark. A number representing a more modest, if not pragmatic, encryption method-Congresswoman Maxim Waters-will also play an important role in any future results in the industry.As Chairman of the Financial Services Committee of the House Committee, she initiated Democratic Party Member Digital Assets Working Group Its mission is to ensure responsible innovation in the field of cryptocurrency and digital assets, and “meet with leading regulators, advocates, and other experts to discuss how these novel products and services can reshape our financial system.”

related: Sand line: U.S. Congress is bringing partisan politics to cryptocurrency

Senator Waters publicly Recognized “Americans increasingly use digital assets to make financial decisions every day,” and affirmed that her committee will explore “the prospects of digital assets in providing faster payments, instant settlements, and lower remittance transaction fees.”

What exactly is going on?

The good news is that under the awesome speech, there is a key word: regulation. Obviously, at this point, a Chinese-style full-scale war on cryptocurrency is not an option in the United States. Sort out the rules of the game before the next presidential election.

Part of the Biden administration’s efforts was the establishment of the President’s Financial Markets Working Group, a superhero team composed of SEC, CFTC, OCC, FDIC, and Federal Reserve system executives, led by the Secretary of the Treasury.

The main result of the working group so far is a 26-page report on stablecoins, which recommends that Congress designate some stablecoin-related activities-such as payment, clearing, and settlement-as “systemically important.” (This will inevitably lead to stricter supervision) and restrictions Stable currency issuance Depository institutions, namely banks.

As in the pre-Biden era, the main problem lies in the core classification of digital assets. The PWG report failed to propose a new explanation and prioritized a single regulatory agency, which allowed various regulatory agencies to monitor different types of encryption-related activities for a long time.

In October, Rostin Behnam, Chairman of Commodity Futures Trading Commission A member of the Democratic Party claimed that as many as 60% of digital assets can be classified as commodities, which is equivalent to proposing the agency to become the main regulator of cryptocurrency in the United States. He further stated that his agency and the Securities and Exchange Commission may need a “regulatory structure for securities and commodities.”How will this help Ongoing patchwork of supervision methods Still a mystery.

Democratic cause

There are several reasons to believe that the main publicity activities in 2021 will take some practical actions next year. The first is the universal idealistic mentality of the Democrats in the United States. For example, actively supervising large technology companies is an important part of this mentality.

Although President Barack Obama and some regulatory agencies Worked Together with Google and Twitter to promote the development of Internet business, Joe Biden’s government is in a wave of general anxiety about international cyberattacks, personal data leakage, Meta’s crisis management, and the huge impact of the overall huge influence on the political process accumulated by technology giants. On the stage.

Although Meta and Google have been fighting allegations of anti-competitive behavior in court with federal and state regulators for some time, Biden’s team has also pledged to hold tech companies accountable for the toxic comments they host and strengthen their anti-competitive practices. Supervision.

However, in 2021, we have not yet seen any major policy steps in this direction. Neither of the two major legislative proposals-Amy Klobuchar’s bill, which would prohibit large-scale technology platforms from favoring their products and services, and a bill by the House of Representatives Democrats to abolish the impact of Article 230 of the Communications Regulation on technology Some of the protection bills provided by the company have become law.

The second reason the Democrats are eager to put cryptocurrency under regulation is pragmatic: The Biden administration and its allies on Capitol Hill need funding. Biden’s first-term agenda relies heavily on the ambitious Roosevelt infrastructure project.Although 1.2 trillion US dollars Infrastructure Investment and Employment Act It managed to gain bipartisan support and was signed into law on November 5th. After Democratic Senator Joe Manchin announced his opposition to the current draft, the bill is now pending and will cost nearly $2 trillion.

It is estimated that if it enters the president’s desk, the spending plan will increase the deficit by 360 billion U.S. dollars within 10 years, so tax increases are urgently needed. This is what makes the booming crypto industry an important battlefield for the Democratic Party. The Democratic Party sees the possibility of getting some cash from it and the urgency of preventing tax evasion through digital tools.

What’s next?

There is no doubt that the Biden administration will continue to implement a strict regulatory agenda in 2022. Next year we will see more congressional hearings, but more important negotiations will be held behind closed doors, and the Democratic Party will finally decide whether the SEC, CFTC or any other agency should lead cryptocurrency regulation.although Sharod Brown’s recent “with or without Congress” remarksIt is also hard to believe that the Republican Party will let its opponents determine the fate of the industry.