What Could Legislation Do for Bitcoin in the US?

By Olusegun Ogundeji for CryptocoinsNews

A section of US Democrat and Republican congressmen now agree to something about cryptocurrencies: the need for them, as lawmakers, to know more about what it is.

According to U.S. Rep. Mick Mulvaney, most of the lawmakers do not know the difference between bitcoin and the blockchain technology hence the formation of the bipartisanBlockchain Caucus last month to help their colleagues stay up to speed on evolving digital currency and blockchain technologies, and develop policies that advance them.

“…we really started this caucus as a sort of way to introduce our colleagues and their staff members to what this technology is so that when they start to hear more and more about it, and they will start to hear more about it, that they have good information as we start to talk about things we can do in terms of government policies,” Mulvaney told Bloomberg in a live interview about the caucus – or the congressional member organization – he co-founded with Jared Polis, a Democrat from Colorado. “We don’t care what you think about bitcoin – you like it or you don’t like it, the underlying distributed ledger technology is real and its potentials exist far beyond its application in the financial services. That’s what we’ve been trying to introduce folks to.”

CMOs are usually set up to pursue common legislative objectives. They can also help get other legislators up to speed on a subject in the hopes of formulating future laws that affect that niche. Whether this particular group would be able to wield much influence is yet to be determined but it sure seems to be a good initiative for the cryptocurrency movement.

Mulvaney and Polis also are working with the Coin Center, a Washington-based nonprofit that focuses on digital currency technology, to help Congress understand how it all works. Coin Center’s executive director, Jerry Brito, is one of the appointed board members of Digital Currency and Ledger Defense Coalition DCLDC which was recently founded to help protect individual constitutional rights and civil liberties in connection with regulatory and law enforcement scrutiny and efforts relating to digital currencies (e.g. bitcoin) and ledgers (e.g. blockchains).

According to Brito, DCLDC brings together over 50 of the top lawyers from around the US who focus on digital currency and blockchain legal issues “…in a united effort to protect the individual constitutional rights and civil liberties of innovators experimenting with these promising new blockchain technologies.”

He likened the objective of DCLDC to keep “the way free for innovators pushing the envelope to build out promising network technologies” to the role defense coalitions played to make the early internet reach the global scale it is today.

All these moves come at a time when British billionaire entrepreneur Richard Branson saidblockchain technology could bring an “economic revolution” in many developing countries where proving ownership of assets or getting access to capital is difficult.

A similar view was shared by billionaire bond manager Bill Gross who runs the $1.5 billion Janus Global Unconstrained Bond Fund in an October investment outlook. He touted bitcoin and blockchain as an option for investors who may lose faith in the global financial system and seek havens.

He stated: “At some point investors — leery and indeed weary of receiving negative or near zero returns on their money, may at the margin desert the standard financial complex, for higher returning or better yet, less risky alternatives. Bitcoin and privately agreed upon blockchain technologies amongst a small set of global banks, are just a few examples of attempts to stabilize the value of their current assets in future purchasing power terms. Gold would be another example — historic relic that it is. In any case, the current system is beginning to be challenged.”

It now seems Bitcoin, as well as its underlying technology, blockchain, is no longer as new as it used to be.

With all these going on, Mulvaney’s suggestion for him and his colleagues to seek guidance on bitcoin and adopt a “take a hands-off approach” on blockchain while examining its potentials, would ring a bell. “We don’t need to go first. We just need to make sure we don’t discourage other folks from looking at the technology and its full application,” he said in the interview as he seeks for an opportunity to make the technology evolve on its own as innovators explore its use.

But what would a government recognition or regulation to that effect mean? Using the case of Japan, it would be a good move. After Japan passed a bill that mandated the regulation of Bitcoin and virtual currency exchanges by the Financial Services Agency (FSA) in May, the measures seem to help the recovery process from the Mt. Gox scandal which has given Bitcoin a bad name in Japan.

About 430 billion yen in bitcoins was reported traded in Japan in the first half of 2016,increasing about 50 times from the previous year, but in July alone, more than 200 billion yen in bitcoins was traded. The regulation gave it more legitimacy in the public eye.

First appeared at CryptocoinsNews