United States Congress Member Brad Sherman (D-California) has come forth once again to bash crypto, and this time, there were no holds barred. On Thursday, May 9, Sherman allegedly proposed a federal ban on all digital assets.
Sherman’s concerns about crypto are seemingly rooted in the potential that cryptocurrencies have to undermine the US dollar: “I look for colleagues to join with me in introducing a bill to outlaw cryptocurrency purchases by Americans, so that we nip this in the bud, in part because an awful lot of our international power comes from the fact that the dollar is the standard unit of international finance and transactions,” he said.
Today in Congress Rep. Sherman called for a bill to ban all cryptocurrencies.
This is why Coin Center is needed in DC now more than ever. pic.twitter.com/jgikm7z8bI
— Coin Center (@coincenter) May 9, 2019
Concerns Over Avoidance of International Sanctions
Sherman also expressed concern over crypto’s ability to empower nations that have been sanctioned by the United States: ‘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,” he said.
He may have a point. Cryptocurrencies have been on the radars of countries like Iran, Russia, and Venezuela as a way to evade international sanctions. After some Iranian banks were temporarily blocked from using the SWIFT financial messaging system, for example, the country purportedly began developing its own cryptocurrency and cryptocurrency-based electronic banking and payment systems, although neither of these have made their public debut yet.
Additionally, the United States barred domestic investors from purchasing the Venezuelan Petro, the country’s “oil-backed” cryptocurrency, after the international community agreed that it had been developed as a method of illicitly accessing international debt markets. In Russia, an advisor to President Vladimir Putin said last year that a national cryptocurrency would allow the country to “settle accounts with our counterparties all over the world with no regard for sanctions.”
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A Ban Probably Wouldnt Pass, But Legislative Movement Could Begin
So, in a way, it seems that Sherman is indeed right to be concerned: “Whether it is to dis-empower our foreign policy, our tax collection enforcement, or our traditional law enforcement, the purposes of cryptocurrency – the advantage it has over sovereign currency – is solely to aid in the dis-empowerment of the United States and of the rule of law.”
However, some members of the crypto community have come forth to criticize Sherman for his own alleged associations with illegal financial activity:
.@BradSherman was so concerned about $crypto users using #cryptocurrency for deceptive and illegal financial activity, yet his top campaign donation came from a company that had to forfeit $13.3 million to the US Government for facilitating illegal gambling. pic.twitter.com/mLn0WHU6jR
— The Crypto Dog? (@TheCryptoDog) July 18, 2018
Additionally, it is unlikely that a comprehensive ban on cryptocurrencies would do much to deter the entities who are developing and using cryptocurrency networks for criminal purposes. If anything, a ban could push crypto networks farther underground, making them much more difficult to police.
— ⚡Crypto Kimbo ⚡ (@cryptokimbo) May 10, 2019
Given the strength of the cryptocurrency community in the United States, and the support that has been shown to the cryptocurrency industry from other branches of the government, it is unlikely that such a bill would ever actually pass–however, Sherman’s noise around crypto could cause some legislative stir around crypto, which may not be such a bad thing.
Interestingly, this is the second time that a high-profile figure in the media has proposed a comprehensive ban on cryptocurrencies this week. Nobel Prize-winning Economist Joseph Eugen Stiglitz told CNBC on Monday that “I actually think we should shut down the cryptocurrencies.”