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- The U.S. bipartisan debt-raise agreement saw the 30 percent digital asset mining tax scrapped.
- Nonetheless, crypto firms in the United States remain under siege following SEC’s regulatory enforcement actions.
The recent escalation of the crypto crackdown in the United States by the Biden administration through the Securities and Exchange Commission (SEC) has caused more digital asset-focused companies to shift to friendlier international markets. Reportedly, the Biden administration is promoting a digital dollar that will be issued by the Fed instead of digital currencies.
However, some United States regulators have vehemently stood against the move to issue a digital dollar, with the argument that it will violate the democratic right to financial freedom.
Furthermore, governments will have more powers to freeze or seize assets through CBDC, a luxury that has not been readily available with fiat currencies. Additionally, there is a risk of governments regulating spending behavior, where a CBDC can be programmed to buy limited goods only.
As a result, the Biden administration through the SEC recently charged Binance and Coinbase Global with listing unregistered securities including Cardano (ADA), Polygon (MATIC), and Solana (SOL), among many others. The move has resulted in several centralized exchanges including Robinhood delisting the named crypto assets, thus sidelining interested American investors from seamlessly accessing the crypto market.
Additionally, most decentralized financial platforms (DeFi) have ceased issuing their services to the United States market in fear of legal scrutiny.
Senator Cynthia Lummis Vows To Bring Crypto Back to America
The United States debt crisis, which was postponed by a few years following a bipartisan agreement in the past few weeks, has escalated the crypto regulatory talk. According to Wyoming Senator Cynthia Lummis, the Biden administration was forced by bipartisan talks to abandon the 30 percent digital assets mining tax.
Additionally, the crypto-friendly Senator announced that she is working on a regulatory framework to allow investors in the country to own and trade digital assets.
We successfully prevented @POTUS' 30% digital asset mining tax from being included in the debt ceiling deal but the fight is far from over.
I am working on a regulatory framework that will allow individuals and companies to own and trade digital assets in America.
Stay tuned…
— Senator Cynthia Lummis (@SenLummis) June 10, 2023
The move is influenced by the outcry from crypto firms and investors that the Biden administration is working against the nascent industry. Moreover, Coinbase recently announced the launch of an international market, Gemini announced a new global headquarter in the United Kingdom, and Binance has significantly reduced its presence in the United States.
According to SEC Chair Gary Gensler, almost all crypto assets are unregistered securities operating in a ‘catch us if you can’ mode. Already, the SEC is fighting Ripple Labs in court for allegedly selling XRP to the secondary market to fund its operations. Notably, the SEC alleges that Ripple sold XRP coins and assumed the securities laws, which ostensibly were put in place nearly 100 years ago.
Market Outlook
The need for digital assets in the American market is mostly to hedge against rising inflation. Moreover, Bitcoin has a fixed supply while the United States dollar has an infinite supply from the Fed. As a result, other countries, led by Russia and China, have been strengthening the BRICS alliance to move away from the dollar as a global reserve currency.
