In this blog post, BPI Advisor Jason Brett outlines the emerging anti-bitcoin consensus forming between certain US Senators and Wall Street leaders.
The relationship between the banking sector, political figures, and Bitcoin has often been fraught with contention. This dynamic was most recently highlighted during a Senate Banking hearing, where Senator Elizabeth Warren posed a pointed question to Jamie Dimon, CEO of JPMorgan Chase, about his views on Bitcoin. Dimon's response, advocating for a ban, was not unexpected given his longstanding criticism of Bitcoin and Warren's highly publicized efforts to “stand up an anti-crypto army.”
This event is symptomatic of a broader, and dangerous trend – a growing belief in Washington that cryptocurrencies should be banned outright. This is well-exemplified by the recent, and notably bipartisan traction around Warren’s Digital Asset Anti-Money Laundering Act (DAAMLA). The Massachusetts Senator has persuaded 19 colleagues to champion the bill which, as written, amounts to a de facto ban on Bitcoin. Among those supporters is Roger Marshall, a Republican Senator who co-sponsored the bill with Warren.
This effort to effectively ban Bitcoin in the U.S. is not only being championed on both sides of the isle, but also by the banking industry. Senator Marshall revealed that the American Bankers Association (ABA) helped write the bill.
The underlying motivations for such regulatory moves are multifaceted. From the banking perspective, there is of course latent concern about Bitcoin's potential to existentially disrupt the financial system. But for now, the major concerns seem to revolve around how the asset is integrated and monetized within the existing banking system.
Senator Warren, traditionally critical of Wall Street, has prominently about-faced, now advocating for financial regulations in lockstep with the banking lobby. While her motivations are unknown, Warren’s anti-crypto views reflect a broader progressive view that if new monetary technology can improve financial inclusion, it must be owned and operated by the Federal government.
Senator Marshall’s involvement, possibly influenced by the fallout from figures like Sam Bankman-Fried, adds another layer to this complex dynamic. His push for a strict regulatory framework on digital assets has surprised many onlookers and caused much controversy online. Following his announcement of support for DAAMLA, many Bitcoin enthusiasts took to X to castigate the Senator. Notably, vitriolic posts on the internet don’t exactly win friends or influence policymakers.
Thankfully, the pivotal role in this debate might be played by Senator Sherrod Brown, Chair of the Senate Banking Committee. Brown's reluctance to endorse the bill indicates that the path to any stringent Bitcoin regulation is not straightforward. Without his support, and with no companion bill in the House, the likelihood of DAAMLA becoming law remains low. Yet, the mere presence of such legislation sets a troubling tone in the discourse around Bitcoin regulation.
In conclusion, the journey of Bitcoin through the legislative and regulatory landscape is fraught with challenges and opposition. While the current climate seems to favor stringent regulation, this is not the end of the road. The situation calls for continuous engagement from Bitcoin advocates to ensure that future policies are balanced, fair, and conducive to innovation. The SEC’s approval of spot Bitcoin ETFs, allowing financial institutions to monetize the asset more easily, may herald shifting views from policymakers and bankers.
Finally, Bitcoin supporters should take note of Senator Warren’s outsized impact on the discussion of its regulation. This saga exemplifies the profound impact individual Senators can have in influencing legislative direction. Hopefully Bitcoin’s supporters in Congress succeed in using that influence to steering these discussions away from draconian proposals and toward productive public policy.