Is Bitcoin Legal In The US? Cryptocurrency Regulations Trends | Crypto-Geography - Part 3

Is Bitcoin Legal In The US? Cryptocurrency Regulations Trends | Crypto-Geography - Part 3

Table of Contents

In case you missed you can check out the first and second part of this series here.

Influence of the US Foreign Crypto-Policy

American foreign policy can be one of several factors moving the following countries towards buying Bitcoin, alongside lingering domestic political and economic crisis, semi-legal corruption and crime, economic collapse and mere desperation, as the case might be. Maybe, these are not the best motivation factors for crypto sphere development, but, well, you know what they say: any port in a storm. 

US and Crypto in Venezuela

U.S. President Donald Trump has made a number of political, economic and diplomatic moves to defeat President Nicolás Maduro, who recently ordered the country’s leading bank to accept the nation’s cryptocurrency Petro (PTR). As soon as the U.S. administration froze all Venezuelan government assets, people started to siphon off their money out of the country. As Coin Dance data reveals, weekly trading volume for Bitcoin (BTC) against the Venezuelan Bolivar on peer-to-peer site LocalBitcoins has posted a new all-time high. 

US and Crypto in China

This scenario is obviously repeating in China, as the trade war is rapidly escalating. According to eToro data, trading of Bitcoin surged 284% during the key moments of the US-China conflict - between 19.05.2019 and 19.08.2019, compared to the pre-war period between 22.03.2019 and 22.06.2019. 

US and Crypto in Mexico

The first text in the Crypto-Geography series describes the situation with crypto in Mexico. Banxico, the Bank of Mexico, is living up to its name trying to ban crypto. Besides, Trump is building the wall at the US-Mexico border, which will be an obstacle not only for transporting  people, but for the cashflow between the two countries. This will yield a good crypto harvest, as emigrants working in the US will keep transferring funds to their families in Mexico. 

The prospects of the crypto industry in the USA

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So what’s next, what does the future hold for crypto in the USA? “The world that Satoshi Nakamoto — author of the Bitcoin white paper — envisioned, and others are building, is an unstoppable force. We should not attempt to deter this innovation, and governments cannot stop this innovation, and those who have tried have already failed.” This is a quote from Patrick McHenry, a ranking member of the U.S. House Committee on Financial Services. That a high ranking representative is so positive on crypto is a great sign, and if the US were to more openly throw its economic weight behind crypto development it would undoubtedly invigorate all aspects of the industry. That would be the best-case scenario.

However, McHenry doesn’t speak for everyone and there are many on the other side of the fence, and powerful figures at that. On July 11, President Trump took to Twitter to share his views on cryptocurrency, saying “I am not a fan of Bitcoin and other cryptocurrencies, which are not money and whose value is highly volatile and based on thin air.” Trump is joined in his crypto skepticism by his Treasury Secretary Steve Mnuchin who recently commented, “I can assure you I will personally not be loaded up on Bitcoin in 10 years.” Also, in May 2019, the U.S. Democrat Congressman Brad Sherman introduced a bill to ban BTC and other cryptocurrencies as they threaten the U.S. international financial power, saying Bitcoin needs to be "[nipped] in the bud." 

Crypto has it all to play for in terms of the regulatory framework and legislative legitimacy in America. One thing that should be kept in mind, though, is the precedent set by Silicon Valley, where technology goes first and regulations come after. The home of Apple Inc., Adobe Systems, Google and Netflix can be viewed as a state within a state, with a sensational third-highest GDP per capita in the world. Nevertheless, California has among the highest taxes in the nation. Its base sales tax rate of 7.25% and top marginal income tax rate of 12.3% are the highest tax rates in the USA.

But, ironically, not all valleys have to share with the Big Brother. Crypto Valley Association, the largest independent, government-supported association, aims at building the world’s leading blockchain and cryptographic technologies ecosystem. Due to the United States’ lack of a uniform regulatory framework, Crypto Valley rooted in Switzerland to avoid tax surprises. The company “is uniquely positioned to make the most of the decentralized Swiss political system and its matchless business environment”. Apparently, Singapore fintech festival and other global crypto conferences, hackathons, and industry events that Crypto Valley organises, attract envious looks from the West and make the US consider for a moment what would happen if the legislation on crypto was a bit more loose. 

There are a lot of exciting projects at work in America right now, and their development is not being significantly hampered by lawmakers. If, and it seems nearly inevitable from where we’re standing now, development and mainstream adoption continue to move forward and reach a point at which crypto has established itself as a regular facet of American finance, lawmakers will have no choice but to follow suit.

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