A California Democrat, Brad Sherman called for members of Congress to join him in established a bill to outlaw cryptocurrency purchases by Americans. Last May 9th Committee held a Financial Services, Brad Sherman claimed that Cryptocurrency is replaced the USD in the financial system when it comes to conducting illicit activity: I’ll point out though that as we deal with illicit finance focusing on our banking system and our currency, cryptocurrency is moving in to fill the role…[there are detailed instructions on] how it’s secure and secret [and] how it can meet your needs if you’re a tax evader or a drug dealer or a terrorist.”
It is very understandable that BTC association has illegal activity. Technology gained more of its initial traction by doing servicing and underground community. Its use in facilitating transactions on the silk road to purchase drugs and other illegal services which are factors of the technology adoption and its lingering reputation and that is only useful for illegal purposes, which however , outside of BTC, hundreds of cryptocurrencies which are attempting to solve useful real worlds issues. .“I would regard cryptocurrencies as the plastic gun of currency. That is to say, it can be used for a legitimate purpose,” said Sherman. “You can shoot a deer with a plastic gun but the fact is the advantage it has over traditional mechanisms is singularly a benefit for those who wish to commit crime.” said Brad Sherman.
Many in the community respond that Sherman, was grossly overlooking the useful applications of cryptocurrency, the technology’s utility in doing and facilitating illegal activity should not be understated, either. BTC has spurred a renaissance in hacking activity as hackers can now steal assets, with small recourse, which is easily convertible into domestic fiat. The coins applications in ransomware and kidnappings are very hard to shake off, like MOnero and Zcash that both privacy coins have been improved in BTC anonymity shortcomings, With this privacy coins, it is much easier to launder money and order drugs, at the same time, these kinds of technologies have also ushered in a new era of privacy, decentralized governance and non-intrusive finance.
Sherman describes how much of the United States’ international influence stems from USD, and how will cryptocurrency, jeopardizes fiat in that capacity. “An awful lot of our international power comes from the fact that the dollar is the standard unit of international finance and transactions,” said Sherman at the Committee on Financial Services. Clearing through the New York Fed is critical for major oil and other transactions and it is the announced purpose of the supporters of cryptocurrency to take that power away from us to put us in a position where the most significant sanctions we have on Iran, for example, would become irrelevant.” Congressman Sherman is referencing the role of the petrodollar in US foreign affairs. After the collapse of the gold standard in the 1970s, the US standardized oils prices in terms of dollars—giving rise to the “petrodollar” system. Petrodollar was elevated the USD on its status as the world’s reserve currency. The US was able to influence the world’s financial traders and exert force over other countries. For instance, the US can use its force over the global financial traders to suffocate a nation through trade sanctions, barring it from transacting with most of the world—like in the case with Iran.
Sherman said“Whether it is to disempower our foreign policy, our tax collection enforcement, or our traditional law enforcement the purposes of cryptocurrency… the advantages it has over sovereign currency is solely to aid in the disempowerment of the United States and the rule of law.” The fact that Congress people are now seriously considering cryptocurrency a threat to the financial system and the rule of law is a testament to its traction and utility, both among criminals and honest users.
As per Sherman, cryptocurrency has the potential to “disempower” the United States and the US dollar, and that’s both exciting and terrifying. Ironically, just one year ago, in March of 2018, Rep. Sherman was educated by Peter Van Valkenburgh, Director of Research at CoinCenter, about the benefits of cryptocurrency for those in developing nations.