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

The decline of bitcoin's price has been touted by former Biden economic advisers as a vindication of the administration's crypto policy. However, their argument relies on selective memory and omission of crucial facts. The Biden administration's approach to crypto was characterized by aggressive regulatory efforts, but these efforts were often misguided and had a perverse effect on the industry. The administration's strategy of regulation-by-enforcement, rather than establishing clear rules, led to the demise of legitimate businesses and the thriving of bad actors. The 'Operation Choke Point 2.0' episode, in which banks systematically debanked lawful crypto businesses, is a stark example of the administration's flawed approach. The authors of the op-ed dismiss crypto as having 'almost no practical use,' but this claim is not supported by the facts. Crypto has enabled fast and low-cost cross-border remittances, which have had a significant impact on the lives of millions of people. Moreover, blockchain technology is being used by major financial institutions, such as Fidelity and JPMorgan, to build new financial applications. The op-ed's criticism of crypto is based on short-term price movements, which is an analytically unserious approach. The Bitcoin network may be slow, but it is secure, and this is a quality that should be of utmost importance to regulators. The authors' invocation of the straw man of a taxpayer-funded bailout of the crypto industry is also misleading, as no serious policymaker has proposed such a thing. The Biden administration had a historic opportunity to establish the United States as a global leader in digital asset regulation, but it chose to weaponize the banking system against a legal industry, resulting in a lose-lose-lose for innovation, consumer protection, and the U.S. crypto ecosystem.