The True Cost of Biden's Crypto Policy: A Legacy of Hostility

The decline in bitcoin's price does not vindicate the Biden administration's approach to cryptocurrency, as two former economic advisers claim. Their opinion piece in the New York Times omits the fact that the administration's policy was not based on a reasoned regulatory framework. Instead, it was characterized by aggressive enforcement efforts that had a perverse effect: legitimate companies were driven out of business, consumers were harmed, and innovation was stifled. The administration's strategy allowed bad actors to thrive, while the lack of clear rules benefited those who never intended to follow them. The authors also ignore the troubling episode of 'Operation Choke Point 2.0,' where banks systematically debanked lawful crypto businesses without due process. This approach cut consumers off from financial tools without putting a single policy through the democratic process. The authors' dismissal of crypto as a 'painfully slow and expensive database' with 'almost no practical use' is also misleading. They acknowledge that crypto is used for international wire transfers, but downplay its significance, despite the fact that it enables fast, low-cost cross-border remittances for millions of people. The Biden economists' claim that no major tech firms are using blockchain technology is also incorrect, as many companies, including Fidelity, JPMorgan, and Visa, are actively building on blockchain infrastructure. The op-ed's focus on bitcoin's price decline is analytically unserious, and its labeling of the Bitcoin network as 'slow' ignores its security benefits. The authors' invocation of a taxpayer-funded bailout of the crypto industry is a straw man, and their concern about moral hazard is selective, given the Biden administration's actions during the Silicon Valley Bank collapse. The op-ed's implication that the crypto industry's political donations are corrupt is also misleading, as the industry's advocacy for favorable regulation 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, creating a lose-lose-lose for innovation, consumer protection, and the U.S. crypto ecosystem.