Reading 3 min Views 1 Published Updated
U.S. Congressmen Warren Davidson and Mike Flood wrote a letter to the chairman of the Council of Economic Advisers (CEA), demanding clarification on a chapter prepared by the agency for the President’s Economic Report that expressed “hostile attitudes towards the digital asset ecosystem.”
A report presented to Congress in March contained a chapter titled “The Reality of Cryptocurrency Assets” which claimed that such assets “didn’t deliver any of the promised benefits.” The agency’s opinion marked a change in the position taken in the President’s Executive Order to Ensure the Responsible Development of Digital Assets, lawmakers said. They wrote:
“We are working to contribute to Congress to push forward a digital asset regulatory regime that will allow this innovative ecosystem to thrive in the US while putting in place critical safeguards.”
“By holding such a hostile view of the digital asset ecosystem, the administration is only pushing digital asset innovation overseas,” they added, “diverting capital and economic growth from the US to other countries.”
The letter raised questions, many of which immediately arose from cryptocurrency advocates who objected to the claims made in the report. The authors questioned how firms can comply with the law “when the laws that purportedly apply contradict each other, such as when a product is considered both a security and a commodity.”
Related: ‘Keep Your Coins’ Bill Introduced to Limit Government Control of Cryptocurrency
They also asked why the agency rejected the role of Congress, stating that most crypto activity is governed by existing regulations, and “is it the CEA’s view that Congressional legislation will not mitigate potential risks or provide consumers with more protection than exists today?” ”
Finally, lawmakers are demanding to know why the agency, which is part of the Presidential Administration, said that the soon-to-launch FedNow instant payment system and central bank digital currency will be easier and more efficient than digital assets to upgrade the financial system.
There is simply no way the digital assets ecosystem within the United States will survive without some kind of action from Congress to combat the regulatory deluge we’ve seen in the past few months.
Watch my full comments pic.twitter.com/CscbpkorcO
— Rep. Mike Flood (@USRepMikeFlood) April 27, 2023
The letter does not explain what purpose the requested information will serve. The authors have set a deadline of May 26 for responses.
Davidson is a longtime crypto advocate who introduced legislation in April to remove Gary Gensler as chairman of the Securities and Exchange Commission.
In 2021, Flood introduced a bill as a Nebraska state legislator that would allow the state’s financial institutions to operate digital asset custodians. This bill was signed into law. At the federal level, Flood supported Rep. Tom Emmer’s “State Anti-Spying Act” when he announced it in February.