The year 2021 was a watershed year for crypto in Congress.
Whereas before, members of Congress could get away with a passing understanding of the issues or just parroting some commonly held maxims about crypto, a big fight about a vaguely written crypto provision in the infrastructure bill forced them to have a more nuanced understanding and to even have a grasp on how the technology works.
The crux of the fight over the crypto provision in the infrastructure bill was that an overly broad definition would have made it impossible for some actors covered by it to comply with the regulation.
"The community activated and got over 40,000 phone calls into the Senate over the course of five days," said Kristin Smith, executive director of the Blockchain Association, on the latest episode of my podcast, Unchained. "Around Washington, this was noticed. I had colleagues from other industries calling, like, "How did you do that? How did that happen? And I was like, 'This is a very powerful community. They're very, very in tune to what's going on and they're not afraid to speak their minds.'"
Not only did Washington notice, but the crypto industry seems to have gotten the message that it needs to put forth an effort in Washington so as to get policies that are incompatible with how the technology works.
As Smith put it, "so many companies across this space have started to think about Washington, to invest in building teams on the ground to work on policy issues in Washington. I think now, in 2022, we are finally starting to see the infrastructure in place to be an effective advocate and educator in Washington for the first time."
On top of that, added Jake Chervinsky, head of policy at the Blockchain Association, "One of the things that that we gained from last year is a lot more attention and desire among regulators and policymakers to genuinely understand what's going on in this space. I think before last year, there was an assumption among most policymakers, crypto was just a flash in the pan."
He said the task that a trade group like the Blockchain Association has is more education: "The more that people understand what is going on in this space, the more reasonable their approach is."
He also added that members of Congress realized how important this issue is to their constituents, prompting them to actually learn about it, rather than just reciting some negative headlines that they had seen.
Smith also said, "I don't think we've had a situation where a policymaker has gone down the rabbit hole and come out the other end saying this is really bad stuff."
Chervinsky recounted a discussion with "a particular policy maker who everyone would recognize as someone has been very hostile -- once this person learned about ... the Web3 narrative -- the idea that this isn't just about highly volatile or speculative alternatives to the US dollar or something of that nature, but rather that this industry is trying to build a new and more fair version of the internet, there was a lot of progress there in the thinking for this person."
Smith recalled that when she was a Congressional staffer, if she took an idea for legislation to her boss, something they would always ask was whether or not it was an issue that would help them raise money. "It's a really important piece of the puzzle," she said. "And I think it's one that the crypto community is uniquely poised to have an advantage in."
On top of that, another area that the crypto industry is uniquely poised to capitalize on is the fact that many Congress members do take notice of their social media. Chervinsky said, "When these candidates tweet something positive about crypto, they get more engagement on those tweets than basically anything else that ever put out there. And that really moves the needle."
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how the Blockchain Association thinks stablecoins should be regulated
whether the US government should issue a central bank digital currency
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(Cover image photo By Tom Williams/CQ-Roll Call, Inc via Getty Images)