The True Legacy of Biden's Crypto Policy: Regulation Through Hostility

The recent New York Times op-ed by former Biden economic advisers Ryan Cummings and Jared Bernstein is a prime example of selective memory. They claim that the decline in bitcoin's price from its 2025 peak vindicates the administration's approach to cryptocurrency, but this assertion is based on a flawed understanding of the facts. The authors gloss over the most significant aspect of Biden-era crypto policy: it was not a thoughtful regulatory framework, but rather a strategy of regulation-by-enforcement that had far-reaching consequences. The Biden administration's approach allowed bad actors like Sam Bankman-Fried to thrive, while legitimate companies were driven offshore or out of business, and consumers were harmed. The administration's failure to establish clear rules led to a perverse outcome, where the only beneficiaries were those who never intended to follow the rules. The authors conveniently ignore the 'Operation Choke Point 2.0' episode, where banks systematically debanked lawful crypto businesses without due process, formal rulemaking, or legislative authority. The Biden administration's approach to crypto was marked by a lack of transparency and accountability, and its legacy is one of hostility towards innovation and consumer protection. The authors' dismissal of crypto as a 'painfully slow and expensive database' with 'almost no practical use' is also misguided. In reality, crypto has enabled fast, low-cost cross-border remittances for millions of people, and stablecoins have reduced global remittance fees, which average nearly 6.5%. Furthermore, blockchain technology underpins a rapidly growing ecosystem of financial applications, with major companies like Fidelity, JPMorgan, and BlackRock actively building on blockchain infrastructure. The op-ed's news hook is bitcoin's price decline, but using short-term price movements to condemn an entire asset class is analytically unserious. The authors' labeling of the Bitcoin network as 'slow' is also misleading, as it prioritizes security over speed. The Bitcoin network's security features make it an attractive option for users in areas where regular citizens are targeted by their governments. The authors' repeated invocation of the straw man of a taxpayer-funded bailout of the crypto industry is also unfounded, as no serious policymaker has proposed such a thing. The stablecoin legislation referenced in the op-ed creates fully reserved payment instruments that are overcollateralized with liquid government bonds. The Trump administration's bitcoin reserve proposal also involves no new taxpayer expenditure. In contrast, the Biden administration authorized extraordinary measures to guarantee all deposits when Silicon Valley Bank collapsed in 2023, raising concerns about moral hazard. The op-ed's focus on crypto industry political donations implies corruption, but this is a misleading narrative. The crypto industry's advocacy for favorable regulation through political participation is a cornerstone of American democracy, and the authors' suggestion that this is inherently corrupt would indict virtually every sector of the American economy. The Biden administration had a historic opportunity to establish the United States as the global leader in digital asset regulation, but instead chose to weaponize the banking system against a legal industry, creating a lose-lose-lose for innovation, consumer protection, and the U.S. crypto ecosystem. Ultimately, it is the Biden administration's crypto haters who owe the public an explanation, not the industry's boosters.