The future of cryptocurrency has a lot to offload about the reality of the industry going mainstream. Over the past few years, every eye in the cryptosphere has glimpsed the global adoption of digital assets continuing to increase. If we look at the soul of crypto, we find blockchain technology and decentralization, which join hands to introduce security and transparency to one.
When the first cryptocurrency, Bitcoin’s whitepaper, was oriented to the world by the pseudonymous Satoshi Nakamoto, it was visioned to give back monetary power to individuals and avoid total economic dependency on mainstream banking.
As the industry is unwinding big while enlightening the world about its potential, we can witness the push and pull among regulators and crypto organizations.
Did El Salvador note the future of cryptocurrency?
In February, United States lawmakers Jim Risch, Bob Menendez, and Bill Cassidy introduced a new bill noting El Salvador’s Bitcoin adoption. The Accountability for Cryptocurrency in El Salvador (ACES) Act came in concern about the future of cryptocurrency and the global adoption pace of the digital ecosystem.
The Salvadoran embracement of the revolutionary crypto asset as a legal tender raised concerns among U.S. lawmakers. Many senators raised questions about Central America’s economic stability and financial integrity. Risch cited that such measures of Salvadorans have potentially weakened their sanctions while empowering malign nations like China and organized criminal organizations.
The ACES Act will now seek greater clarity on the Bitcoin adopting nation’s policy and require the administration to mitigate the potential risks that threaten their monetary system.
Following the situation, Cassidy underscores that the Salvadorans’ recognition of BTC as a legal tender opens the door for illicit activities. Such recognition gives a boost to money laundering cartels. Cassidy further explains that if the house wishes to combat money laundering and preserve the dominance of the USD as the world’s reserve currency, they must tackle such issues head-on.
Following the future of cryptocurrency, a couple of U.S. senators want to fend the nation from the possible risk of digital assets embracement. According to P.R. released earlier this month, Congresswoman Norma Torress and Congressman Rick Crawford made a coalition. Notably, the Congresspeople are looking to protect the mainstream financial infrastructure, which consists of banks and mediator institutions. Through the means of protecting the legacy system, they are looking to protect the USD’s dominance in the world as the reserve currency.
Norma Torress underscored that:
“Global financial institutions have studied and detailed the numerous risks of El Salvador’s adoption of Bitcoin… We respect its right to self-govern, but the U.S. must have a plan in place to protect our financial systems from the risks of this decision.”
Almost a year ago, Nayib Bukele, the president of El Salvador, announced plans to make the coin designed by Satoshi Nakamoto their legal tender. Later in the previous year, they also made the coin a legal tender in the country. The cryptosphere commemorated the nation’s measures and deemed it one of the amplest milestones since the inception of the digital economy. However, the legacy financial sector, banks, politicians, and international institutions were all not that pleased with such a finding.
It is noteworthy that the determination of Nayib Bukele aided the nation with a potential financial relief package. This helped the nation stabilize its financial infrastructure and protect it from the International Monetary Fund (IMF). Ultimately, the scenario created troubles with the United States’ current administration. The lawmakers in the U.S. still consider that the Salvadoran president has made a rush in nailing whether they should make BTC legal tender.
El Salvador’s hasty decision caused concerns for the stability of the United States and Salvodoran’s economic relationship. Rick Crawford believes that their job is to comprehend the potential effects of such measures and what the U.S. can learn going forward.
Crypto helps avoid economic sanctions
In March, U.S. Senator Elizabeth Warren introduced a bill to the U.S. Congress. Through the ordinance, she was looking to crack down on the use of virtual assets in the nation. Following the future of cryptocurrency, she scrutinized cryptocurrencies to avoid economic sanctions. During the Russia-Ukraine war, the anti-crypto movement took pace. Russia unveiled plans to adopt digital assets to detour a host of economic sanctions. Following the scenario, the U.S. senators begin to find ways to disrupt such possibilities for the nation.
Reports publicized that the bill proposed by Senator Elizabeth required local digital assets firms to report narratives to the U.S. Treasury Department. The reports include the privacy of customers’ identities and transfers to private digital wallets.
The bill aims to force crypto firms to choose between doing business in the nation or with sanctioned people and entities. However, the second option would threaten the secondary sanctions on foreign exchanges.
Leading crypto assets exchanges like Kraken, Coinbase, and Binance forbade a blanket ban. However, these firms emphasized that they would stress their commitment to compliance with the United States sanctions. To clarify, Warren cited that:
“The bill will ensure Putin and his cronies don’t use crypto to undermine our economic sanctions.”
American politics on cryptocurrencies have weak leadership
Earlier this month, Anthony Scaramucci, former communications director for the Presidential House and founder of Skybridge Capital, expressed concern. According to a report shared by the Cointelegraph, it is noted that he considered the future of cryptocurrency and blockchain technology to be very bright. However, inadequate supervision in American politics has concerned him.
Scaramucci speaks at the Australian Financial Review Crypto Summit held earlier this month. In the event, he spoke about the existing and forthcoming states of cryptocurrencies in politics in the U.S. He added in his sermon that the underlying technology of crypto-assets seems unwieldy right now, and he sees a glittering day for the cryptosphere. However, the path is full of hindrances, among which the biggest one seems absolutely despicable politicians in the American administration. His first concern is what if some of the current front-runners become the next president.
Senator Ted Cruz has been precisely mentioned by Scaramucci. The lawmaker is often referred to as the ‘apotheosis of hypocrisy‘ by the founder of Skybridge Capital asset manager. It is striking that the lawmaker is a public virtual currency enthusiast and introduced legislation last month to prohibit FED from using CBDC.
Although Scaramucci is concerned about politicians, the U.S. revenue authority’s classification of virtual assets makes it almost incomprehensible to snuff. Besides, Scaramucci also highlighted one of president Biden’s optimistic stances:
“I predict that we’ve already met the crossover moment where Bitcoin is going to be fairly regulated, and other cryptocurrencies will be fairly regulated here in the U.S. for all of those reasons… Just imagine where we could be in five years, where virtually everyone in the Western world will have a smartphone wallet on their smartphone, and they’ll likely be able to transact with every restaurant in the world.”
Not all politicians are criticizing cryptocurrencies
Last month, a few Congresspeople remarked how the U.S. Securities and Exchange Commission (SEC) has been suppressing the future of cryptocurrency. Observing the scenario, the associates of the U.S. Congress wrote a bipartisan letter. Republican Minnesota Congressman Tom Emmer then put forward the letter to the US SEC chairman. The letter cited the scrutiny of crypto firms by the regulator and voiced concern that such an overburdensome probe could halt the industry’s growth.
The legislators also pointed out the boundaries of the administration and believed that the agency had been misusing its division.
“It appears there has been a recent trend towards employing the Enforcement Division’s investigative functions to gather information from unregulated cryptocurrency and blockchain industry participants in a manner inconsistent with the Commission’s standards for initiating investigations.”
The letter, which four Democrats and three Republicans co-signed, stressed that the SEC chair has been abusing its investigation powers. Moreover, it also highlighted that the agency has been stifling innovation with crypto firms’ scrutiny.
Acknowledgment of the blockchain ecosystem
President Joe Biden is about to present his Executive Order. The ordinance will be Ensuring Responsible Development of Digital Assets. It will ultimately take the United States on a path toward more comprehensive regulation of the digital sector.
A highly visible proponent of virtual assets, Lawmaker Cynthia Lummis highlighted that the E.O. misses the fact that the majority of users in the cryptosphere are law-abiding. Furthermore, she also underscored that the ecosystem is trying to make our financial infrastructure better.
The Executive Order is a significant extent being taken by the U.S. government. Still, the industry ought further tangible development for financial infrastructure. The Congressional House is closely divided along partisan lines, and the Democratic party split internally over its position on digital assets has dampened the hope of better infrastructure through legislation.
While considering crypto as a property, taxation policies are another gap in the blockchain ecosystem’s playbook. Jesse Rodriguez, an accountant at Kaufman Rossin, states that:
“What we have now is guidance in the form of notices and FAQs on the IRS website while we wait for future judicial decisions and code sections to establish formal tax guidance… There is no timeline available on the expected formal guidance.”
Conclusion
There is no drought of interest in the digital economy. But seeing the future of cryptocurrency, the U.S. will soon have to issue its CBDC. Although the world has a digital yuan, and yet nobody is looking to hold it. A bearer-private central bank digital currency could cement the dominance of the USD in the world while dollarizing the internet overnight.
Although the E.O. extent is significantly being taken, the key to the order is consolidating the government’s effort. The order will help address the new financial reality within the scope of each authorities jurisdiction. President Biden’s E.O. will likely pave the way for a more focused and coordinated federal oversight of the future cryptocurrency domain.