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

The attempt by former Biden economic advisers, Ryan Cummings and Jared Bernstein, to justify the administration's crypto policy by linking it to the decline in bitcoin's price is a clear case of selective memory. Their op-ed in The New York Times glosses over the significant damage caused by the administration's approach, which was characterized by aggressive enforcement rather than clear regulation. This strategy allowed fraudulent actors like Sam Bankman-Fried to thrive, while driving legitimate businesses offshore or out of operation, harming consumers, and stifling American innovation. The authors' dismissal of crypto as having 'almost no practical use' is also misleading, given its role in facilitating fast and low-cost international remittances, a service that benefits millions of people worldwide. Furthermore, their claim that no major tech firms are using blockchain technology is incorrect, as numerous prominent companies are actively building on blockchain infrastructure. The op-ed's focus on short-term price movements to condemn crypto is analytically flawed, and their labeling of the Bitcoin network as 'slow' overlooks its unparalleled security. The invocation of a taxpayer-funded bailout of the crypto industry is a straw man, as no serious policymaker has proposed such a measure. The stablecoin legislation and the Trump administration's bitcoin reserve proposal do not involve new taxpayer expenditures. In contrast, the Biden administration's guarantee of all deposits after the Silicon Valley Bank collapse in 2023 raises questions about selective concern for moral hazard. The op-ed's implication that the crypto industry's political donations are corrupt is also unfounded, as political participation is a cornerstone of American democracy. The Biden administration had the opportunity to establish the United States as a leader in digital asset regulation but instead chose to weaponize the banking system against a legal industry, resulting in a lose-lose-lose situation for innovation, consumer protection, and the U.S. crypto ecosystem.