Congress Should Provide Guidance - Essay Example

Bitcoin enthusiasts from around the world are wondering if the US Congress would consider Bitcoin a policy issue.

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With so many issues that are dividing the American legislators, it is common for Bitcoin enthusiasts to think if and when the Bitcoin technology will become an issue in the nation’s capital.

Even if it hits this inflection point, there will still be questions about how much resistance bitcoin would face and about bitcoin’s ability to achieve bipartisan support.

Indeed, there is a possibility that crypto currency will soon become an issue to bring US politicians together. Bitcoin technology has potential applications which can help expand financial access.

If the leading crypto currency and block chain technology are allowed to develop naturally, they can shift the society away from the zero-sum politics.

A possible by-product of Congressional inaction on the crypto currency might be that other government agencies will start taking action to express their own areas of oversight.

One risk is that different agencies might disagree on how Bitcoin should be treated. The difference in opinions is acceptable as the digital currency has many technical aspects.

The Internal Revenue Service provided guidance on how bitcoin can be reported for tax purposes. It should be treated like it is a property, and not a currency.

Commodities and Futures Trading Commission and other agencies have commented about the topic of regulating bitcoin, but did not debate whether bitcoin is a commodity or currency.

Dan Backer, founder of BitPAC, a political action committee, said he expects that at least 1 more agency will get involved in the bitcoin regulatory discussion.

He said SEC will perhaps express its opinion at some point.

Dan Backer thinks that finally different agencies will want to handle the issue differently, leading the Congress to provide clear guidance.

He stated that it is important to define Bitcoin as a commodity or equity so that agencies can understand how they should deal with it.

Some committee discussions about Bitcoin have already been held in Congress. The most recent one was on small business use of the crypto currency. Still, many members of the congress have not experimented with the digital currency.

This means that there still is a divide between politicians who understand and appreciate Bitcoin, and those who see it as a threat to users.

BitPAC recently tried to change this. The committee sent bitcoin paper wallets to 8 prominent members of Congress.

Backer pointed at Jared Polis from Colorado and discussed how great he is with bitcoins. Joe Manchin from West Virginia, on the other hand, does not understand much about Bitcoin.

While the thought that Congress might take steps to allow bitcoin technology to flourish is appealing, experts believe that this seems unlikely to happen tomorrow.

David Levinthal, a senior political reporter from The Center for Public Integrity, believes that it might need national media headlines before the Congress takes the issue of bitcoin more seriously.