In a recent Bloomberg interview, Chris Larsen, co-founder of Ripple, voiced his concerns about President Joe Biden’s crypto policies and their impact on the United States’ position in the global blockchain industry. Larsen argued that the stringent regulations proposed by the Biden administration are hindering innovation and causing the nation to lose its leadership in the blockchain space.
The Decline of US Blockchain Leadership:
Chris Larsen expressed his belief that the United States is no longer at the forefront of the global blockchain industry. He attributed this decline to the crypto policies put forth by President Biden, which he sees as inhibiting growth and innovation in the technology sector. According to Larsen, the US once held a dominant position in the blockchain industry, but it has now ceded that position to other global hubs like London, Singapore, and Dubai.
Biden’s Stringent Crypto Policies:
One of the key points of contention Larsen highlighted was President Biden’s proposal to impose a 30% tax on crypto mining, known as the Digital Asset Mining Energy (DAME) excise tax. This tax is intended to address environmental concerns associated with crypto mining by taxing 30% of the electricity cost used in the process. Critics argue that such a tax could stifle the growth of the crypto mining industry.
Additionally, the Biden administration introduced stricter regulations on brokers regarding the tax reporting of digital asset purchases and sales. These rules aim to align crypto asset reporting with existing standards for other types of assets. However, many within the industry argue that this approach oversimplifies the unique nature of cryptocurrencies and blockchain technology.
The Impact on Innovation:
Chris Larsen raised concerns about the potential consequences of these stringent regulations and attempts to classify crypto as a traditional asset. He argued that such policies could be detrimental to the industry’s future growth and innovation. In his words, “Unfortunately, this administration made a really bad call. They pretty much killed San Francisco from being what it was, the blockchain capital of the world.”
Optimism Amid Challenges:
Despite the challenges posed by these regulatory changes, Larsen found reasons for optimism. He cited a July 13 ruling that determined Ripple’s native token, XRP, was not a security for retail sales, a decision that went against the Securities and Exchange Commission (SEC). This ruling, according to Larsen, was a significant development in favor of the crypto industry and highlighted the SEC’s recent legal battles with crypto firms.
Chris Larsen’s critique of President Biden’s crypto policies sheds light on the concerns within the blockchain industry regarding the impact of regulatory decisions on innovation and global competitiveness. While the United States has historically been a leader in the blockchain space, Larsen believes that recent policy changes are causing the nation to lose ground to international competitors. The balance between regulating the industry and fostering innovation remains a challenge, and the outcome will likely shape the future of crypto in the United States.