For regulation, it’s not all bad news for U.S. Democrats to be divided on cryptocurrency

The Biden administration has just passed an executive order to further study crypto assets so they can be regulated, but politicians in the ruling Democratic Party remain deeply divided on digital currencies.

The lack of consensus among U.S. Democrats could mean that a solid regulatory framework for cryptocurrencies may still be a long way off, but it’s also possible that the resulting regulations will be less draconian thanks to the efforts of crypto-friendly representatives. The crypto community is familiar with names that pop up time and time again in the digital asset debate.

On the one hand, there are politicians who are strongly opposed to cryptocurrencies, such as Democratic Senators Elizabeth Warren and Sherrod Brown, while the camp that supports innovation includes Democratic Congressmen Ritchie Torres and Jim Himes.

Their differences run deep, and the political wrangling could further delay any regulatory process in the US.

Senator Warren recently drafted a bill to limit cryptocurrency exchanges and prevent digital assets from being used to evade sanctions. However, it has been widely reported that Russia will not use cryptocurrencies to bypass sanctions, even if individual Russians do.

Continuing to declare war on cryptocurrencies, Warren wrote to the Treasury Department urging it to take a further crackdown on the industry. She reportedly criticized the banking system recently, adding in reference to cryptocurrencies:

"However, substituting an unregulated, unproven system, where scammers and terrorists mingle with ordinary consumers, and where no one knows who is on the other side of the transaction, is not a safe substitute."

Fortunately, some Democratic lawmakers support the crypto industry and the innovations it will bring to the U.S. financial system. One such policymaker, New York Representative Ritchie Torres, said: “The project of radically decentralizing the internet and finance strikes me as a profoundly progressive enterprise.” Then added:

"You shouldn't define any technology in terms of its worst use... Cryptocurrencies aren't just for ransomware any more than money is just for money laundering."

Josh Gottheimer, a Democrat representing New Jersey, has pushed for plans to regulate cryptocurrencies and stablecoins. Last month, he introduced the Stablecoin Innovation and Conservation Act, saying that “the expansion of cryptocurrencies provides enormous potential value to our economy.”

Four Democratic lawmakers wrote their names in a bipartisan letter filed with the SEC on March 16. Gottheimer, Torres, Florida Rep. Darren Soto and Massachusetts Rep. Jake Auchincloss also signed.

The letter, drafted by Republican Congressman Tom Emmer and signed by three other Republicans, seeks to address crypto companies being overburdened by excessive reporting requirements and increased scrutiny of the industry by the U.S. SEC.

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