New Presidency Supports Blockchain & Cryptocurrencies
On February 16, 2017, Republican Representative Mick Mulvaney of South Carolina was confirmed by the senate to lead the White House Office of Management and Budget, by a vote of 51 to 49. Mulvaney, a bitcoin enthusiast, has been instrumental in establishing the bipartisan Congressional Blockchain Caucus. The caucus recently held its first briefing in Washington, D.C., and is dedicated to the advancement of sound public policy on cryptocurrencies and other blockchain-based technologies.
Mulvaney has previously stated:
“Blockchain technology has the potential to revolutionize the financial services industry, the U.S. economy, and the delivery of government services, and I am proud to be involved with this initiative on the ground floor … I encourage Members of Congress to join the caucus and get involved as blockchain technology becomes more widely used across communities and companies.”
Mulvaneys’ confirmation follows the previous week’s decision from Vice President Mike Pence to hire Calabria as chief economist. Calabria, former director of financial regulation studies at the Cato Institute, is a libertarian advocate for free markets and an avid supporter of blockchain and virtual currencies.
Calabria has stated:
“While I’m an economist, not a tech guy, I’m very excited about Bitcoin, as I am about alternative currencies in general, and perhaps even more interested in the blockchain.”
Before joining the Cato Institute in 2009, Calabria worked for the Senate Banking Committee, where he handled housing, mortgage financing, and insurance. Although he’s stated that cryptocurrencies like bitcoin should not be regulated at all, the economist still expresses concerns over the lack of regulation in the greater blockchain space, saying:
“There’s also been little public demand, so far, to ‘do something’ about Bitcoin. So far, it has really been driven by distinct individuals in key policy roles…I don’t think the Bitcoin community should be complacent about the current regulatory environment. The potential to get a lot worse is definitely there.”
Calabria is also opposed to the IRS’s decision to classify and tax cryptocurrencies as a commodity, believing it will complicate and delay mainstream acceptance. Although he does not view cryptocurrency as a security, he is far more concerned about the ways that the Consumer Financial Protection Bureau will handle the issue than the SEC, stating:
“[T]he SEC is deeply divided at the commissioner level, and Chair Mary Jo White has been more restrained that I might have initially feared. You don’t quite have as much curiosity among SEC commissioners as you do with, say, CFTC [Commodity Futures Trading Commission] Commissioner Mark Wetjen. I should be clear that even under our expansive securities laws: I don’t see Bitcoin as a security. I’m far more worried about what the Consumer Financial Protection Bureau might do.”
One of President’s Trumps more well-known supporters is Peter Thiel, the Silicon Valley billionaire and co-founder of PayPal. As the only member of Trump’s transitional team from the tech world, Thiel holds a unique position to influence policy agenda as it pertains to his expertise and interests.
Thiel, who provided $1.25 million to Rebekah Mercer’s Trump super PAC, originally created PayPal to be an online currency before Satoshi Nakamoto invented bitcoin in 2008. Although Thiel failed in his original mission, he has stated that, even though cryptocurrencies like bitcoin have been successful as a new form of currency, the payment system of bitcoin is still somewhat lacking.
On the subject of cryptocurrencies replacing fiat currency as legal tender, Thiel takes a pragmatic approach, as he said in an interview:
“If you look at a dollar bill it says ‘this is legal tender for all debts public and private.’ The stress you have to always put on is the word ‘public,’ as long as you have to have dollars to pay your taxes. If you don’t have dollars to pay your taxes, people with guns will come after you and lock you up, or do something bad to you. You can’t use Bitcoin to pay taxes. You’ll have to still convert [bitcoin] into dollars. So on that level, it doesn’t really threaten the supremacy of the dollar as a reserve currency, which is probably ultimately backed by a U.S. military power.”
Thiel is also recognized for his fellowship program, which provides $100,000 to young innovators who want to build new things. In 2014, Ethereum founder Vitalik Buterin was selected as a fellow. Other fellows include Gary Le of Zcoin and Joey Krug of Ethereum-based Augur.
Although he holds no official cabinet position, Thiel served as a delegate to the Republican Nation Convention and even delivered a speech at the event, which took place in his hometown of Cleveland, Ohio. It was after this speech that the San Francisco mogul first met then presidential candidate Donald Trump, who commented:
“You were terrific. We’re friends for life.”
Other cryptocurrency supporters include Representatives Jared Polis (D-Colo.) and David Schweikert (R-Ariz.), the current co-chairs of the bipartisan Congressional Blockchain Caucus (Schweikert replaced Mulvaney as co-chair when the caucus relaunched a couple of weeks ago).
Polis rose to prominence in the digital currency community in 2014, when he delivered a satirical response to calls from lawmakers who were hell bent on banning bitcoin. In his letter, he argued that the US dollar, not bitcoin, should be banned. He also stated that he will use his powers in Congress to fight against any and all attempts made by the government to enact policies that restrict the growth of bitcoin and the startup community that surrounds the technology, stating:
“If there was an agency that reacted in an irrationally negative way to digital currencies, I would be happy to rally support [in Congress] to restrict their funding.”
Schweikert garnered attention in 2014 over House Resolution 859, a bill aimed at dismissing employees of the US department of Veterans Affairs (VA). The bill sprang from controversy surrounding inefficiencies in the VA Department that caused delays in medical treatment for veterans (such as in 2014, when it was revealed that some VA staff had manipulated scheduling records to mask the delays).
More than just seeking to fire employees, Schweikert advocated blockchain technology as a possible solution to address the issue. In a proposed amendment, he stated:
“Beginning not later than one year after the date of the enactment of this Act, the Secretary of Veterans Affairs shall ensure that veterans seeking health care appointments at medical facilities of the Department are able to use an Internet website, a mobile application, or other similar electronic methods to use distributed ledger technology to view such appointment and ascertain whether an employee of the Department of Veterans Affairs has modified such appointments.”
A Blockchain Administration
Because unpredictability is a theme of the new administration, we will have to wait and see how bullish Trump and his advisors are on cryptocurrencies and economic policies that benefit blockchain technology. ETHNews reached out to several cabinet members for comment, including Mark Calabria and Mick Mulvaney, but at the time of this publishing, they have yet to respond.