US Congress Will Pass Blockchain Bills as Soon as Somebody Tells it What 'Blockchain' Means
Did you hear? Two Congressmen just proposed a law that would end taxation of cryptocurrency and exempt it from securities rules. As of this post, that law, H.R.2144, doesn't even have a name yet. Breaking news!
What does this mean? Will the U.S. finally ditch its insane, nonsensical cryptocurrency regulations---regulations based on laws that are over 80 years old, laws that even its own regulators admit don't really fit?
Maybe, if only they could figure out what "blockchain" means. And no, I'm not being funny.
Earlier this year, several members of the House and Senate introduced the landmark Blockchain Promotion Act of 2019 that would give the U.S. Department of Commerce one year to define "the distributed ledger technology commonly referred to as blockchain technology."
Obama Barack GIF from Obama GIFsYes, that's right---one group of Congresspeople just wrote a sweeping overhaul of decades-old legislation while another asked the government to take a year to figure out what the problem is.
Welcome to U.S. Congress!
Congress is old
Do you know the average age of a U.S. Congressperson?
59.
Do you know the average age of a person who owns cryptocurrency?
No? Neither do I, but I assure you that person is much younger than 59. According to many different surveys across many countries, the vast majority of cryptocurrency owners are younger than 35.
Ok, Congress is old, crypto is young. So what?
So what?
You realize the U.S. cryptocurrency industry lives under old rules written by old people. New technology, old laws, and the people who are in a position to change those laws don't use the technology.
Watching Congress write cryptocurrency laws is like watching your grandmother trying to use her iPad. You need to give her a lot of instruction, a lot of patience, and she still might not ever get it right.
To its credit, Congress is putting the horse in front of the cart for once. You can't legislate something if you can't define it. But if you're expecting Congress to do anything substantial about the U.S.'s archaic, nonsensical cryptocurrency rules just because a few guys introduced a bill and a few websites wrote about it, you're going to have to wait a while. Take it from a guy who spent the best part of his 20's working in Congressional politics.
But Mark, the internet! They changed the laws for internet!
Yes, about 13 years after two guys in Chicago created the first online bulletin board, Congress passed the High Performance Computing Act of 1991 which pledged the U.S. government's financial and regulatory support for developing the internet.
While Congress might do something like that for cryptocurrency, I wouldn't hold my breath.
Politically, the internet was so different than cryptocurrency. First, it was a U.S. invention. Second, not only was it a U.S. invention, it was a U.S. government invention. Third, all the key players were U.S. companies. Fourth, it had a champion---Senator Al Gore---who was a well-liked, highly-accomplished, and effective legislator. Most importantly, big businesses saw a chance to make money with the internet. New markets, new products, new efficiencies, strong leadership.
Cryptocurrency is public, open-source, anti-government, global, leaderless, and has no champions in Congress. Unless you consider the Congressional Blockchain Caucus, which hasn't updated its website since 2018.
Progress will happen slowly. Set your expectations accordingly.
Measure Progress in Inches
It'll also be an uphill battle. Cryptocurrency still hasn't shaken the stench of silk road and ICO scams. Let me give you a sample of the cryptocurrency bills that have passed at least one chamber of Congress, compared to those that haven't even gotten a hearing.
Passed at least one chamber of Congress
- Homeland Security Assessment of Terrorists' Use of Virtual Currencies Act---orders U.S. government to report the use of cryptocurrency by terrorists.
- FIND Trafficking Act---orders U.S. government to report the use of virtual cryptocurrencies in sex and drug trafficking.
Haven't gotten a hearing
- Blockchain Regulatory Certainty Act---exempts blockchain developers from laws written for money transmitters.
- U.S. Virtual Currency Market and Regulatory Competitiveness Act---pledges U.S. government support for cryptocurrency development.
- RESCUE Act for Black and Community Banks---orders U.S. government to report ways blockchain technology can increase investment by lower-income individuals.
- Blockchain Promotion Act of 2019 (Senate version)---orders U.S. government to define what blockchain is.
- Blockchain Promotion Act of 2019 (House version)---orders U.S. government to define what blockchain is.
- H.R. 2144 (bill to be named later)---excludes cryptocurrency from securities laws.
- Stop Senior Scams Act---includes blockchain companies on a committee investigating how to stop financial scams that target seniors.
That's it.
(I neglected to mention the Senate report ripping bitcoin for its energy consumption.)
Does this mean Congress thinks cryptocurrency is for sex traffickers, drug dealers, and terrorists?
No, but it does mean those are Congress's biggest concerns right now. Can you blame them for wanting to pause all those pro-crypto bills?
Meanwhile, good, sensible, necessary changes languish in Congressional committees.
Is it any wonder the many of the best cryptocurrency projects are setting up overseas?
Posted from my blog with SteemPress : https://markhelfman.com/2019/04/12/us-congress-will-pass-blockchain-bills-as-soon-as-somebody-tells-it-what-blockchain-means/
Yeah. Just ...sigh. LOL
I'm pretty sure the bankers are happy to let the retirement-age congress continue to think crypto is Teh Debil, and will finance their campaigns to keep it that way.
But maybe if we all whack our reps with a clue by four...
Don't bother! Instead, contact the cryptocurrency lobbyists and ask them how you can help them advocate for crypto. I explain in this post:
https://markhelfman.com/2019/03/08/crypto-bills-introduced-in-us-congress-but-dont-write-your-congressperson-about-it/
I will check out those groups you linked in the article, thanks. But re: they're overwhelmed with letters, an ex-aide wrote an article I read a while back, where they said, if you want to be noticed, you should call on the phone. DO NOT email, that will just be one of thousands and at best, might get a check in a pro/con list if it's a popular enough topic that they're being inundated with it so they're tallying opinions. Second most noticed method is to write a handwritten, snail mail letter, because nobody takes the time to do that anymore.
Yeah, I was a stockbroker in the 80s, and Congress, then and now, was mostly defined by their inaction.
I spent most of 1988 In the European country of Luxembourg, as research assistant to a German banker and lawyer, who was doing his doctoral thesis on the lead bank's liability to disclose material information to partner banks in a consortium, given that banks are by default considered to be sophisticated investors, if they could have discovered the same information through their own due diligence.
He was comparing banking and securities law in civil law countries, such as Germany, France and Japan, versus common law countries, such as the U.K., the U.S., Canada and Australia.
So, since I was helping to distill the English part of the research, I wound up spending the better part of a year in Europe effectively studying common law and the U.S. legal system.
It was an eye-opening experience.
So yeah. I'm likely close to the average age of those in Congress, but I've actually embraced technology, am invested in cryptocurrencies, and have written Congress more than once to ask them politely to get their heads out of their collective assets, so to speak.
The introduction of the bill to remove cryptos from the control (and ongoing manipulation) of the securities market is a strong step in the right direction, but I'm not holding my breath.
On the other hand, the land of slush funds and hush money could benefit greatly from the secrecy of crypto, so it might actually happen sooner than we think.
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We shall see, won't we?
Indeed we shall.
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What were the biggest differences between common law and civil law countries?
Lots.
The primary difference is that in a common law country, such as ours, laws are promulgated based on prior case law, so the law evolves over time, and is ever changing. Precedence is everything.
In a civil law country, by contrast, the law is the law, and it rarely changes much at all, and then only in tiny increments. Any citizen can look up any crime or infraction in his or her country's civil code, and read in black and white precisely what the given penalty would be, if found guilty. No guesswork, straightforward, and little leeway for the judges.
Interestingly, a lot of the case law I wound up reading was from Louisiana, which is unique in that it follows both civil law, as in France, and common law, as in the rest of the United States.
Some pretty fascinating cases have come out of Louisiana.
We do still have civil proceedings, such as breech of contract, which follow the civil law procedural process.
As one example, whereas criminal proceedings follow pure common law, where there is a presumption of innocence until proven guilty, in a civil proceeding, there is no such presumption, and both parties must offer proof.
So which is better? Both. And neither.
As an American, I favor the presumption of innocence, and the ability of our courts to take into consideration changing times and circumstances.
At the same time, there are many times where our courts have outright failed to serve justice, not that civil law courts are immune to that either. Overall it's probably a wash, and Louisiana may have the right idea, though frequently with the wrong execution.
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