Urgently calling on Congress to “nip this in the bud”, U.S. Congressman Bradley Sherman recently proposed a bill outlawing the purchase of cryptocurrencies in America.
His reasoning, whilst intended to convince Congress of the dangers of cryptocurrency, ironically illustrates the genuine value and utility of the unstoppable technology.
Senator Sherman shared his reasoning for the ban when proposing the bill to representatives: “… an awful lot of our international power comes from the fact that the dollar is the standard unit of international finance and transactions. Clearing through the New York Fed is critical for major oil transactions.”
Sherman rightly points out that many in the cryptocurrency community are opposed to the global politics played via the American dollar, and the subsequent unrest and corruption this influence is perceived to cause globally.
He elaborated that “… it is the announced purpose of the supporters of cryptocurrency to take that power away from us, to put us in a position where the most significant sanctions we have on Iran, for example, would become irrelevant.”
The United States exerts considerable power via the tool of USD currency, requiring the international trade of oil, for example, to be settled under the authority of the American dollar. If nations such as Iran wish to shift away from the current USD-imposed hegemony, cryptocurrency could serve as the ideal escape hatch.
The people of Iran appear to already be aware of this loophole, as can be observed by the growth in the popularity of bitcoin trading via localbitcoins over the last couple years in the heavily sanctioned country.
Sherman continued his argument: “So whether it is to disempower our foreign policy, our tax collection enforcement, or traditional law enforcement, the purposes of cryptocurrency, the advantage it has over sovereign currency is solely to aid in the disempowerment of the United States and the rule of law.”
Ironically, Sherman’s fear-driven arguments offer up all the reasons to support cryptocurrency. Many American citizens do not wish to see their wealth and taxes being washed away in a sea of indefinite wars and permanent quantitative easing.
The Congressman also points to the value of freedom in a currency that is not bound by any sovereign nation and is instead, self-sovereign, by nature of its decentralization.
Sherman further revealed his naïveté by suggesting that cryptocurrency can simply be banned and thus, controlled.
Alternatively, one could surmise that he is counting on the ignorance of others in his efforts to persuade voters; and is fully cognizant of the fact that the nature of cryptocurrency prevents it from being centrally controlled.
While it could be made more difficult to transact, by blocking on-ramps such as exchanges that provide fiat to crypto purchases, it is impossible to stop the flow of cryptocurrencies due to the decentralised nature of their networks. Particularly in the case of nations wishing to circumvent sanctions, for example, it would be virtually impossible to halt the trading of cryptocurrency from one nation to another. This, as the senator so eloquently illustrated, is what makes cryptocurrency special.
Interestingly, the Congressman conveniently neglected to recognise that criminals far and away prefer to use fiat cash, in particular USD cash, as a means of exchange, with its characteristic lack of transparency and traceability.
Opensecrets.org offers some perspective on Sherman’s possible motivations for being so adamantly opposed to a technology that he appears to not fully understand. Top lobbying clients contributing to Sherman’s Democratic party include VISA, Mastercard, Discover Financial, and Capital One.
Top campaign donors for Sherman include Royal Business Bank, Capital Group Companies, and Northrop Grumman, a “leading global security company”. It does not take a great deal of imagination to infer why these parties may be threatened by the widespread adoption of a non-sovereign currency that allows permissionless and trustless transactions, as well as the independent storage of value.
Although Sherman might be motivated by corporate interests, his justifications inadvertently serve as convincing arguments for the transformational power of cryptocurrencies.