On Friday, Utah Republican Senator Mike Lee outlined three consequences that could jeopardize the nascent cryptocurrency industry: (1) the creation of a central bank digital currency, (2) disparate regulation by states and (3) strong federal regulation.
Speaking at the Permissionless III crypto conference in Salt Lake City, Lee said the trio of possibilities pose serious risks to the rapidly growing digital assets sector. Lee and fellow Republican John Curtis have been particularly critical of federal and state regulation of digital assets, likening it to financial oversight that could stifle the crypto industry.
“Instead of chasing you, we should be your protectors,” Curtis said of the government’s role.
Lee has vehemently defended the cryptocurrency’s status as a medium of exchange and criticized its categorization as a security – a major argument of the US Securities and Exchange Commission, which has launched several lawsuits against the industry for failing to register cryptocurrency products as securities: “Cryptocurrency is not a security. Cryptocurrency is not a commodity. Cryptocurrency is used as a medium of exchange,” Lee explained. “I don’t even think we should tax the capital gain on his transfer,” Lee said.
The speech also denounced central bank digital currencies (CBDCs), which governments around the world are exploring as a way to streamline payment systems and mitigate the volatility and fraud of traditional cryptocurrencies. While China’s CBDC program is already underway, the US Federal Reserve is still evaluating the potential and feasibility of a CBDC in a domestic context, with the crypto industry largely viewing it as a threat to financial freedom.
