- Cryptocurrency has the potential to reduce transaction costs.
- Republican lawmakers have called for preserving private sector innovation in the cryptocurrency industry and regulatory clarity for consumers, entrepreneurs, and investors.
The Senate Republican Policy Committee (RPC) published a policy paper on April 7. The policy paper was titled “CRYPTOCURRENCY GOES MAINSTREAM.” The policy paper focuses on crypto.
According to the policy paper, cryptocurrency has progressed from a fringe fad to a mainstream form of investment and finance. The market is dominated by Bitcoin, accounting for 41% of the total market value. As a result, governments worldwide have become interested in regulating the industry. Several governments have also taken steps to create their digital currencies.
The Cryptocurrency Market Cap Has Grown Quickly, as seen in the image below.
The total market capitalization of cryptocurrencies increased from approximately $19 billion in January 2017 to $2.2 trillion in January 2022. Cryptocurrency has created billionaires almost overnight, as either luck or foresight, depending on who you ask, has increased the value of their holdings by staggering amounts.
The policy paper further stated that as the use of cryptocurrency has grown, the federal government has become more interested in it. As a result, president Biden issued an executive order that established policy objectives for digital asset development and directed agencies to submit policy recommendations. These goals included safeguarding consumers’, investors’, and businesses’ privacy, ensuring financial stability, and preventing illegal uses such as money laundering and ransomware.
According to the paper, cryptocurrency is growing up, and there are many potential benefits of cryptocurrencies. It further said that some observers have widely praised cryptocurrency’s ability to reduce payment costs and time significantly. For example, Ukraine’s government has received more than $100 million in cryptocurrency donations to aid in its defense against Russia’s unprovoked war. The donation would have been more challenging to achieve through traditional means. However, cryptocurrency prices can be volatile, which some believe has kept them from being widely used to make payments.
Some people may prefer cryptocurrency’s relative anonymity to sharing personal information with a traditional financial institution. In contrast, some supporters argue that cryptocurrencies could be helpful in areas or countries where people lack trust in their government or institutions.
Some observers compare the current state of cryptocurrency to the early days of the internet, emphasizing that we have yet to see the full scope of how it can be applied. As a result, they argue that allowing the industry to innovate is critical.
The paper also said that the dark side of cryptocurrency is the anonymity and decentralized nature of cryptocurrency. The anonymity and decentralized of the crypto industry make the criminal attracted to the crypto industry, a big dark side of crypto.
According to the paper, critics also argue that cryptocurrencies are bad for the environment. It is terrible due to the amount of electricity required to “mine” them, and cryptocurrencies, in general, are nothing more than glorified scams, riddled with fraud and prone to speculation.
In short, the policy paper has mentioned all the factors of the crypto industry, like how it is growing day by day, the potential benefits of crypto, and the dark side of the crypto industry. Even though nothing in the paper is new, it is notable because it illustrates the development of a more cohesive Republican crypto policy position.