US Lawmakers Draft Bill 'Protecting' Cryptocurrencies From Government Interference

Tyler Durden's picture

Several members of the US Congress are drafting legislation that is intended to recognize certain digital currencies and 'protect' them against interference from the federal government. The question is - does the 'protection'

CoinTelegraph reports that the bill, which will provide protection to cryptocurrencies that comply with certain minimum requirements to prevent them from being used by those engaged in illegal business practices like drug traffickers and terrorists, is expected to be filed in September 2017, according to DailyCaller.

Based on a reliable source, at least one Republican senator and two Republican congressmen are working on the draft legislation.

The legislators, however, have requested that should not be identified due to the sensitivity of the issue and the complexity of the proposed solution.

A source close to the effort told TheDC,

“the center piece of the plan is to mainstream digital currency so it can be treated just like the American dollar.

 

First, there is a new entity that is considering issuing a brand new digital currency that is compliant with anti-money laundering laws unlike any other in circulation.”

Although cash has some of the same problems being used to pay for illegal activities, the perception that digital currencies are being used for illegal activities is seen as the primary roadblock to wholesale acceptance by the American public.

The source told TheDC the new model is going to follow federal laws that prevent money laundering. This is a break through and could lead to the use of digital currencies replacing the dollar for many transactions.  The legislation is expected to be introduced in early September.

The source asked the members of Congress involved in drafting the bill not be identified yet, explaining, “this is a very complicated issue and staff are working through some issues that have in the past stopped alternative currencies from being launched.”

They continued that:

...the law needs to be changed to protect digital currencies from federal government harassment to make sure that a complaint currency can be backed by value, the currency cannot be treated like a security or investment, and that transfers are protected against taxation.

 

The bottom line is that Congress needs to remove all the obstacles to a vibrant digital currency that has voluntarily taken the initiative to keep the bad guys from using it.”

What is perhaps most ironic here is that government lawmakers are attempting to codify rules to stop government lawmakers interfering with the free and open exchange of a decentralized currency... by setting rules that potentially interfere with the free exchange of said currency.

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Hulk's picture

God I love these old style zh beatdowns !!!

Solid Gold Bubble's picture

Sometimes all you could hear were the flat, hard, packing sounds over the yelling. Or the wet choke when someone gasped and sprayed.. Stop!

AtATrESICI's picture

Dude, you have the asshole tunnel vision thing down pat.

Not to mention your posts are quite annoying.

tmosley's picture

Of course they are. Anything that induces cognitive dissonance is annoying. 

Whatever you do, don't re-examine your position!

AtATrESICI's picture

You should recognize your own position bent over and intellectually ass raped by nearly all those you engage in discourse with. In your case ass rape may not convey the type of trauma I am attempting to allude to and most would associate with. Please substitute something you would find distressing for ass rape.

tmosley's picture

Hahaha, that is EXACTLY what a highly biased person would think, like how Bill Nye's supporters thought that he wiped the floor with Tucker.

Ridiculous!

No Zbig Deal's picture

Let me jump in please...As I understand it, Bitcoin only "works" when the majority of nodes are in "consensus". If ur dot gov peeps, or CBs, or whoever the boogeyman is today create more nodes than are currently in play, they would "control" Bitcoin. I believe some entity could summon enough computing power to ostensibly do this. No?

 

To no one in particular:Feel free to use for a book idea

Pardon the oversimplification

tmosley's picture

>I believe some entity could summon enough computing power to ostensibly do this

Sure, from the sky, with their government/god magic.

But no, there is a LOT of hashing power behind bitcoin. The Chinese are the only ones who could even think about a 50% attack, and in that case, the rest of the community would see it, and would create a fork banning the bad actors very quickly. That would mean less overall hashing power, but still quite a lot. Unless the government built their own ASIC production in secret, .gov purchases of the sort of equipment required for a 50% attack would quickly be known, and the algorithm would likely be changed to make a 50% attack impossible (as has already been accomplished elsewhere, with coins like DASH requireing more like an 80+% attack to compromise the network). Hell, if things REALLY went south, the market would just choose something like IOTA, whose network becomes stronger when it is under attack, turning the attackers compute power against them.

No Zbig Deal's picture

Thanks, wanted to make sure you weren't talking out of your ass. I also recall your earlier posts about MSRs, or LFTRs for nuclear, which I favor. Cool to know in the 'age of liquidity', there are options...

 

Edit: Thanks. Checking out the IOTA whitepaper now.

Golden Phoenix's picture

Bitcoin +51,000%. You lost before you even started. I'm guessing you don't know it because you measure your success in life by the number of Facebook Likes.

Dukes's picture

Precisely. Something's fishy.
It either has zero chance of passing and is purely optics or else something more nefarious.

LawsofPhysics's picture

The MATH dictates that the banks must hyperinflate, PERIOD.

When your government demands your taxes in a digital currency, you will know the truth.

Solid Gold Bubble's picture

Said digital currency would also have to be hyperinflationary in nature in order to service the exponentially increasing interest on the national debt. How would moving over to a custom government crypto solve their problem? Sure, with the omniscience of the blockchain they could tax all the microtransactions that slip through their fingers under the current fiat system, but that is not going to be nearly enough to fight the exponential rise in debt repayments.

chunga's picture

Or it's just fake news...citing reliable sources.

groundedkiwi's picture

Its probably going to be named The Phoenix Bill.

Lorca's Novena's picture

The digital currency thats going to be protected is the one being developed by Goldman Sachs. They'll go after all of the other "unregulated" ones...

$1 says the congresscritters behind this bill are directly involved with goldmansachsofshit.

LetThemEatRand's picture

I suspect you hit the nail on the head.  What most here are missing is that part of the story where they say they are going to protect the "compliant" digital currency, which is being developed.  In other words, not an existing crypto.  Almost by definition, bitcoin and most others will be deemed non-compliant because they are not fully trackable in real-time (without a lot of work by the NSA), which is probably what the new digital currency will require.  I see this as a harbinger for making other electronic currencies illegal.  It's bullshit, but many of us have seen this coming for a while.  This may be that moment.

Lorca's Novena's picture

We better wake up Fonestar...

 

Good point about the 'real time tracking', I hadnt thought of that, but what better excuse could they want? Theyll just say "unregulated cryptos are used by tewwoists". As like anything else the free market does, the gubbmint will eventually take control.

Yellow_Snow's picture

Or could be that there's something big coming over the horizon... several countries have already jumped in trying to legitimize cryptocurrencies.  Banks want in.  Why is that a bad thing?  More money in this the better.  Bitcoin can take care of itself... that's the beauty of it ;)

Solid Gold Bubble's picture

Just a thought: in theory - ANY crypto currency can be exchanged for ANY other crypto currency from anyone in the world to anyone else in the world completely anonymously on a decentralised exchange. This would mean that even a totally centralised backdoored skynet ZOG coin could freely be swapped for any current or future free cryptocurrency, banned or not. This would in theory mean that ANY commerce at all occurring between "illicit" non-govt cryptos and real goods and services would then drive down the value of ZOGcoin to the point of it being totally unusable. The government needs their fiat to be a certain value to exercise the control they want. The hyperinflation is being managed and controlled via ZIRP/NIRP, gold manipulation, etc.

They also need black market activity (drugs, arms trade, etc) to be conducted IN THEIR FIAT. Hell, they even need the whole world to use their crappy fiat to buy oil or the whole system collapses. All it would take is someone like Iran or Russia to announce they will now accept Bitcoin for their oil and it's ALL OVER. 

I suspect the powers that be are completely checkmated here. Even successfully banning everyday commerce in non-approved cryptos won't work because even a bare bones black market in Bitcoin will reprice (((their))) crypto to near zero. Game over, assholes.

Conax's picture

They admitted it right here: 

"First, there is a new entity that is considering issuing a brand new digital currency that is compliant with anti-money laundering laws unlike any other in circulation.”

 

Once this one is in place BTC peeps will be 'encouraged' to swap for LloydCoin. Or else.

PumpherDumper's picture

I won't trust CONgress until every action, or inaction, they take is available on the blockchain.

monero's picture

Reading between the lines: any cryptocurrency not specifically 'protected' will be banned or its users harassed by the federal govt.  Only currencies which are easily traced will be allowed.

FreeShitter's picture

Wrong mindset, you should be finding ways to decentralize your way of life, bitcoin or not.

LawsofPhysics's picture

You need to be more than "decentralized", you need to be completely INDEPENDENT with respect to clean water, food, energy and waste management, period.

 

FreeShitter's picture

 I have some decentralized guillotines as well. Made in the USA.

Solid Gold Bubble's picture

OMFG... just saw the price of Monero today and thought I was hallucinating.

 

About fucking time!

tmosley's picture

That's fine though. Just use a decentrilized, anonymous exchange to trade for a better coin.

This is like leaving the gates open to the barbarian hoards, but setting up a defense on one of 20 different streets heading toward the keep. Just walk around.

monero's picture

I'm not saying they will succeed, but they can certainly make things more difficult for the average person who prefers privacy by controlling end-point exchanges like localbitcoins, coinbase, etc.  Unless people are getting paid in crypto directly the feds can cause lots of problems, like they did in NY state with their stupid "bit license."

smacker's picture

Yes, that's it.

And once the new ((traceable)) cryptocurrency is up and running and all the snags ironed out, it'll become compulsory to use it.

messystateofaffairs's picture

Yay, the cockroaches are going to protect us.

Goldilocks's picture

Serial entrepreneur launches 'kosher' cryptocurrency only for Jews (BitCoen)
https://www.rt.com/business/398940-kosher-cryptocurrency-bitcoen-jewish-...
Aug 8, 2017

tmosley's picture

Jews jewing jews. I love it.

Whenever I see "Cryptos for X granfalloon", I immediately associate said coin with the word "scam". 

Crypto is for everyone. Some might have special use cases, but something that is useful to a Chinaman, but not an Austrian, or a Canadian, is just ridiculous.

Goldilocks's picture

What's good for the goose is good for the gander er goyim?

ItsAllBollocks's picture

Serial entrepreneur launches cryptocurrency for skeptics. It's called $US.

1.21 jigawatts's picture

Question is:  Which exchanges will it open on so I can pump and dump that shit?

ItsAllBollocks's picture

6 years ago I retired and spent my super on gold, silver and bitcoin equally. All I can say is thank dog I bought bitcoin.

johnlocke445's picture

Does anyone really believe that a law like this one will Pass Congress? I have more of a chance of having my balls bitten off by a Chinese, SJW vampire on Valentines day, five minutes to midnight while I eat a bowl of cereal with a wooden spoon.

Yen Cross's picture

   Does anyone feel like they're getting the Royal Reach-Around by Lloyd Blankfein, dressed as a Tranny?

    This is laughable...  The cryptos are having growing pains, NOT unlike everyother piece of shit fiat in world history.

   WE must protect you from yourselves.

   Sincerely ,

   Lord Rothschild

Solid Gold Bubble's picture

if by royal reach around, you mean $1500 profit in 3 hours (Monero), then no... not really.

Collectivism Killz's picture

Really read between the lines: a lot of people in govt own Bitcoin and don't want the party to end either. Having spent many years working in government, I can tell you most people are self-serving sheisters much more than tyrants. Hell, USAA was the first large bank to work with coinbase and they brag about it. Now, I am sure there is some mark of the beast conspiracy and trying to make soldiers first adopters, but I think it is simply that many in government know what is coming and they want their hedge as well. Hell, every story I have heard about people getting fired for mining Bitcoin on the job has been government employees. Most recently a Dept of Education person in NYC.

tmosley's picture

Janet has been using fed computers to mine BTC for weeks now. WEEKS!

Collectivism Killz's picture

I am not convinced Old Yellen even knows how to turn on a computer. Hell, I doubt she even know where she is half the time.

GIVJetMech's picture

Absolutely not! Digital currencies are too easily tracked. While on one hand this does help curb illegal activities, on the other it will prevent people from stockpiling cash reserves for emergency purposes (or for that matter, anything they WANT to stockpile cash for!). Already we are hearing that in the case of an economic swoon, the government is considering negative interest rates. This is to MAKE people spend or invest their earnings. If you don't, your savings will be TAXED as a penalty. A digital currency will make it even EASIER for the government to keep track of whatever you have in the bank.

Bitcoin - with its anonymous tracking system - is different. You can BET bitcoin will NOT be the choice digital currency of the US Government because they can't track, control or get ANYTHING OUT IF IT! They are trying to make it seem like they are "protecting" digital currencies. While in reality, they are really trying to develop a digital currency they can track, tax and control!

No! No digital currencies.

Latitude25's picture

The USD is mostly digital.

GIVJetMech's picture

Yes but cash still can be used as a currency. The government has plans to abolish cash and go fully digital. This is unthinkable. It will put too much power in the hands of the government.

discopimp's picture

Wow, it sad that my first instinct is that of distrust...it amazing how far the US has veered from the intentions of the Founding Fathers