The Biden Administration’s Proposed Crypto Regulations Would Kill Innovation

Helen Hodler and Sam Saver meet, fall in love, and start planning their future. Sam opens a savings account and gets 0.06 percent APY (interest rate). The more adventurous Hellen buys a stablecoin — a digital currency redeemable 1:1 with a U.S. dollar — and deposits (or “hodls”) it with an exchange. She gets 8.88 percent APY. Our well-heeled financial-policy setters Federal Reserve chairman Jerome Powell (net worth $55 million), Treasury secretary Janet Yellen (net worth $16 million), SEC chairman Gary Gensler (net worth $119 million) side-eye Helen.

A recent report on stablecoins by the President’s Working Group on Financial Markets outlines official concerns. They think she is too unsophisticated for her choice. They think she and the exchange may pose a systemic risk to the entire U.S. financial system. The report asks Congress to solve these apparent issues but suggests that federal agencies will act alone if necessary.

In reality, smothering people with financial bureaucracy brings far greater risks for our nation’s economic prosperity and stability than do stablecoins. Instead, the federal government should allow stablecoin issuers, crypto exchanges, and the Web 3.0 revolution it will fuel to flourish.

Stablecoins are already vital to the crypto ecosystem. Before their advent, crypto trades paired with fiat currency. Stablecoins made trading faster, cheaper, and more liquid. Although only widely used since 2017, the market has bloomed, with a current capitalization of $131 billion.

Read the full article on National Review.