As the popularity of cryptocurrencies like Bitcoin explodes, the Biden administration is laying the groundwork for stricter regulation, and that could spark a big fight in Congress.
MARY LOUISE KELLY, HOST:
Cryptocurrency is at a crossroads. As its popularity explodes and bitcoin nears a record high, the Biden administration is laying the groundwork for stricter regulation. That could spark a fight in Congress. As NPR's David Gura reports, a small group of lawmakers are concerned that the United States may miss out on being a leader in a financial revolution.
DAVID GURA, BYLINE: Republican Cynthia Lummis is a Wyoming senator, rancher, and HODLer.
CYNTHIA LUMMIS: My son-in-law has a shirt that says friends don't let friends sell bitcoins. And that's my investment strategy for bitcoin.
GURA: A HODLer is a crypto language for someone who bought cryptocurrencies and held onto it, despite its extreme volatility. Lummis paid $ 330 for his first bitcoin in 2013, and today it is worth around $ 60,000. You've bought more since then, which means Lummis can win or lose from the policy you're helping to set up. Lummis wants Wyoming to become one of the crypto capitals of the world.
LUMMIS: So the concept of mining bitcoins and its huge store of value was something that resonated with me, coming from a mining state.
GURA: Wyoming attracts bitcoin miners who use computers to crack codes to create new cryptocurrencies. That's an energy-intensive process, and Wyoming is an energy-rich state. It also has light regulations and offers tax incentives. And Lummis is asking Congress to follow Wyoming's lead.
LUMMIS: We want innovators to innovate. We want to create a space where the United States is a leader in opportunities for the creation and use of digital assets.
GURA: Lummis's approach to regulation puts her at odds with another outspoken member of the Senate Banking Committee. That's Democrat Elizabeth Warren, who wants stricter rules. Cryptocurrency has become a popular investment, but it also has a bad reputation due to how it is used for money laundering and ransomware attacks. Warren told Bloomberg TV that cryptocurrencies are like the Wild West.
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ELIZABETH WARREN: Right now, our regulators and frankly our Congress are an hour late and a dollar is missing, and we need to catch up on the direction of these cryptocurrencies.
GURA: Its worldwide market capitalization is now close to $ 2.5 trillion, which is almost as big as France's GDP. Even the big Wall Street banks now trade bitcoins. And Gary Gensler, director of the Securities and Exchange Commission, shares Warren's concerns. This is what he said in a recent speech.
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GARY GENSLER: This asset class is plagued with fraud, scams, and abuse in certain applications. There is a great deal of hype about how crypto assets work.
GURA: And Gensler is asking legislators for their support and more resources. That makes Senator Lummis nervous. He worries that more rules will make the United States less competitive. And the crypto industry is also fighting back. So far this year, he has spent more than $ 2.5 million lobbying legislators. Republican Congressman Warren Davidson believes Congress must make a decision on what to do with cryptocurrencies and soon.
WARREN DAVIDSON: Basically, the industry is begging, give us some regulatory clarity.
GURA: Davidson also fears that too much regulation could hurt investors and entrepreneurs, but he believes that inaction is also a risk. Davidson says that when he returns to his district in Ohio, his constituents ask him when Congress is going to start setting ground rules.
DAVIDSON: Perhaps the best answer is slowly at first and then suddenly, which is the same way people file bankruptcy, by the way.
GURA: As the industry continues to grow and the popularity and price of cryptocurrencies skyrocket, Davidson says he and his colleagues need to get moving, even if it's a big fight. David Gura, NPR News, New York.
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