US Representative Steve Stockman (R-TX) received widespread praise from the bitcoin community this week after submitting a bill to US Congress that would prohibit any state or federal regulator from passing bitcoin regulation for the next five years.
Though it may face difficulties appealing to lawmakers who aren’t well-versed in the technology, Stockman staunchly advocates for the bill, known formally as the Cryptocurrency Protocol Protection and Moratorium Act, which he views as integral to promoting future job creation in the US.
Speaking to CoinDesk, Stockman indicated that he believes this stay on government intervention in the industry is necessary in order to give the space more time to develop and protect it from special interests that might threaten its growth.
According to Stockman, proposals like the New York State Department of Financial Services’ (NYDFS) BitLicense are “inappropriate” given that the technology’s development is still in its early stages. Citing past innovations in computer technology and the Internet, he said that those entrepreneurs would have been stifled if they encountered similar resistance from regulators.
“It’s too early to be talking about that. Just imagine if Steve Jobs had to deal with this, or anybody starting an Internet company having to hop through the obstacles they’re putting up.”
The proposal, the draft text of which was made available earlier this week, is the second bill focused on digital currency submitted by Stockman, though it is larger in scope.
The earlier bill focused on the tax issues related to bitcoin and sought to designate the technology as a type of foreign currency. If passed, the new bill would also reshape the current tax treatment of digital currencies.
Industry needs safeguarding
Stockman said that he is opposed to government rulemaking on the grounds that, once intervention from a regulatory body begins, this involvement typically does not cease.
“I fear that anytime the government intercedes it never retracts its position. I was at a conference one time and someone said, ‘Oh, after years of government regulation, they’ll decrease.’ And I asked, ‘Where has that occurred’? It never has occurred. Whether it’s the IRS code, or the EPA, the regulations increase.”
Stockman continued by saying that the moratorium “will give the industry a chance to grow unimpeded from people with hidden agendas”, which include competitive interests in the finance and banking industries that want to slow down development.
“Right now, the people opposed to it – they’ve got more firepower and more of an agenda to focus against it,” he said.
Restoring the balance
Stockman said that one of his main goals for introducing the bill – which comes weeks before he leaves Congress – is to stir up the digital currency conversation on Capitol Hill.
Stockman described an environment in which some members of Congress are in support of the technology as a digital innovation, while others look at bitcoin through the lens of criminal and fraudulent activity, saying:
“There are some members that understand and there are other members that don’t. I thought that by putting something forward we could at least start the conversation and discuss it. Right now, there’s such a vacuum and there’s no coalescing around an idea, and I thought, well, if I put something out there, maybe we can have the bitcoin community gather together.”
Where this new legislative effort will go, he conceded, remains very much unclear. Although, he said this general uncertainty surrounding the technology and its regulation is one of the most compelling reasons lawmakers should allow the technology to mature.
“Frankly, we don’t know how this is going to turn out,” concluded Stockman. “It’s not preordained.”
Steve Stockman image via Wikipedia