After nearly a decade of gridlock, the United States may finally be on the cusp of crafting a cohesive policy framework for digital assets. In Congress, lawmakers are mulling a variety of proposed bills governing everything from stablecoins<\/a> and securities rules<\/a> to sanctions<\/a>. The 2024 presidential race, meanwhile, may be the first to see crypto as a focal point.\u00a0\u00a0<\/strong><\/p>\n While both sides of the aisle are playing valuable roles, Republicans \u2014 especially influential congresspeople like Tom Emmer and Patrick McHenry \u2014 have emerged as the industry\u2019s most important allies. However, the GOP\u2019s pro-crypto bias may also be its downfall. From uncritical crypto \u201cmaximalism\u201d to Orwellian surveillance paranoia, Web3\u2019s industry bromides have crept into the party\u2019s campaign rhetoric and, worse, its policy proposals. In seminal upcoming legislative opportunities, such as the House\u2019s draft crypto regulatory bill, Republican policymakers must focus on putting \u201cAmerica first.\u201d<\/p>\n During his presidential campaign announcement in May, Florida Governor Ron DeSantis insisted that \u201cthe current regime, clearly, has it out for Bitcoin.\u201d The candidate\u2019s populist red meat has been the Republican \u201cparty line\u201d on crypto in this election cycle. So far, it has been difficult to differentiate the rhetoric of GOP presidential hopefuls from that of \u201cfreedom-maximalist\u201d influencers on Crypto Twitter.<\/p>\n For candidates like DeSantis, protecting Americans from \u201ca federally controlled central bank digital currency surveillance state\u201d ranks<\/a> high among blockchain\u2019s potential use cases. Even GOP longshot Vivek Ramaswamy, a biotech entrepreneur who claims to \u201cunderstand this stuff in a much more deep and rich way\u201d than DeSantis, says he views Bitcoin as a \u201cdecentralized alternative\u201d to the U.S. dollar and wants<\/a> to \u201cmake the 2024 election a referendum on fiat currency.\u201d<\/p>\n @GOPMajorityWhip<\/a> Tom Emmer joined me in this critical fight to protect our markets: \u201cAmerican investors and industry deserve clear and consistent oversight, not political gamesmanship. The SEC Stabilization Act will make common-sense changes to ensure that the SEC\u2019s priorities\u2026<\/p>\n \u2014 Warren Davidson 🇺🇸 (@WarrenDavidson) June 12, 2023<\/a><\/p>\n<\/blockquote>\n Meanwhile, at the other extreme, progressive Senator Elizabeth Warren and her \u201canti-crypto army\u201d<\/a> depict crypto as an omnipresent threat, simultaneously eroding investor protections, abetting money launderers and worsening America\u2019s \u201ctax gap.\u201d What is lacking in this partisan hothouse is any informed appreciation of blockchain\u2019s potential or its importance to America\u2019s long-term economic interests.<\/p>\n Among the rare exceptions are crypto-savvy GOP lawmakers such as Financial Services Committee Chair McHenry, who spearheaded the House Subcommittee on Digital Assets earlier this year. However, the influence of the crypto industry\u2019s memeified rhetoric is evident even in the party\u2019s innermost policy-making circles.\u00a0\u00a0<\/p>\n Take, for example, the Digital Assets Market Structure (DAMS) bill. The watershed draft legislation, penned in part by McHenry\u2019s committee, marks Congress\u2019s most credible proposed regulatory framework for crypto to date. While, as Messari CEO Ryan Selkis said<\/a>, DAMS is \u201ca 10x improvement\u201d over past bills, it still falls short of bringing regulatory clarity to the industry.<\/p>\n Unfortunately, the proposed bill does more to regulate Web3 as crypto natives imagine it to be than as the industry operates today. In keeping with Republicans\u2019 long-standing preference, DAMS conceives of crypto assets primarily as \u201cdigital commodities\u201d to be overseen by the Commodities Futures Trading Commission. Indeed, the bill paves a clear path for CFTC compliance.<\/p>\n There\u2019s one catch: To qualify as a \u201cdigital commodity,\u201d according to DAMS, \u201ceach network to which the digital asset relates [must be] certified to be [\u2026] decentralized,\u201d which requires that no single person has the \u201cunilateral authority, directly or indirectly, [\u2026] to materially alter\u201d the protocol or to \u201cprohibit any person [from] deploying software that uses or integrates with the blockchain network.\u201d<\/p>\n Read also<\/p>\n This is how to make \u2014 and lose \u2014 a fortune with NFTs<\/p>\n <\/a>\n <\/div>\n Why join a blockchain gaming guild? Fun, profit and create better games<\/p>\n <\/a>\n <\/div>\n<\/div>\n<\/div>\n In other words, much of the more than 160-page draft bill only applies, with any certainty, to two digital assets: Bitcoin and Ether. Meanwhile, protocols with any level of centralized operations (read: most) remain under the jurisdiction of the Securities and Exchange Commission. Though an improvement on the status quo, the path to SEC compliance under DAMS is comparatively convoluted.<\/p>\n The GOP may soon have a shot at defining America\u2019s crypto policy. Now is not the time to succumb to partisan talking points or industry bromides. Lawmakers must clearly assess Web3 as it exists today so that the U.S. can unlock its benefits for decades to come.<\/p>\n As a first step, Republicans must bury the half-baked notion that crypto is antagonistic to the traditional financial system. They also must overcome their aversion to the SEC. In fact, Web3 and \u201cTradFi\u201d are deeply compatible, and America\u2019s gold-standard security laws are a feature, not a bug. In the near term, policymakers should create clear SEC exemptions for digital assets so nascent U.S. protocols can get off the ground. Longer-term, officials should embrace blockchain\u2019s enormous potential<\/a> to enhance the United States\u2019 regulated financial sector.<\/p>\n Most importantly, U.S. officials must recognize that extending dollar dominance to Web3 is a strategic imperative. Forget about blockchain as an \u201calternative\u201d to the dollar; it is a potent tool for extending America\u2019s economic reach. Republicans should lead the charge.<\/p>\n The House\u2019s latest draft stablecoin bill is a good start and underscores McHenry\u2019s policy chops in Web3, but lawmakers can do more. That includes supporting Circle Internet Financial<\/a>, the issuer of USDC. In the Senate, Republicans should emulate Roger Marshall by working with crypto-savvy Democrats, including Warren, to draft industry-friendly KYC and AML rules.\u00a0<\/p>\n Crypto doesn\u2019t need to be \u201ca scam against the dollar.\u201d It can be a powerful strategic asset, but only if U.S. crypto policy truly puts America first.<\/p>\n This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of either Umami Labs or Cointelegraph.<\/em><\/p>\n Subscribe<\/p>\n The most engaging reads in blockchain. Delivered once a
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