Cryptocurrency Needs to be Regulated, Hillary Clinton Warns the Biden Administration

Hillary Clinton sees the need to regulate the crypto space on fear of manipulation by Russia or China

Prioritizing Crypto Regulation 

Hillary Clinton, the former presidential candidate fears manipulation by countries like Russia and China on the cryptocurrency markets could destabilize countries as well as the dollar as the world’s reserve currency. 

In an interview with MSNBC, Hillary Clinton said, ‘We are looking at not only states, such as China or Russia or others, manipulating technology of all kinds to their advantage, we are looking at nonstate actors, either in concert with states or on their own, destabilizing countries, destabilizing the dollar as the reserve currency.’ 

Source: Hillary Clinton is correct for asking for crypto regulations but her justifications need further scrutiny

Politicians like Hillary Clinton are stoking fears by raising concerns about the bogeyman with very broad narratives about cryptocurrencies and its potential threats by eastern superpowers. One of the major concerns highlighted by Hillary is the destabilizing effect on the greenback as the world’s reserve currency.

She added, ‘I just don’t think we have much time, and, therefore, I hope from everything I’m hearing from them that that’s exactly what they’re going to try to do…’ 

Source: Crypto legislation is necessary but it should be molded by forward-looking policies 

Breaking Down the Narrative

There are two major concerns highlighted by Hillary Clinton in her interview. First, the technology can be manipulated, and secondly, the dollar’s role as the world’s reserve currency will be adversely affected. 

Cryptocurrencies like Bitcoin and Ethereum are decentralized and permissionless networks that provide access to digital assets that cannot be confiscated or censored by any government. Politicians like Hillary may not understand that digital assets are classified differently. To suggest that a fully decentralized protocol can be manipulated by perceived adversaries stems from a wrong understanding of a decentralized public network. 

China took drastic actions to prevent Bitcoin miners from operating within its jurisdiction. This has resulted in miners relocating their mining operations out of China. The Chinese government’s action does not fit into the narrative of a nation that wishes to utilize cryptocurrencies to destabilize the US. 

The second concern on the role of the dollar as the world’s reserve currency. This concern is better addressed by preventing excessive dollar ‘printing’. The Biden administration can prevent this by having tighter monetary policies. 

In a blog post by the International Monetary Fund, ‘The share of US dollar reserves held by central banks fell to 59 percent—its lowest level in 25 years—during the fourth quarter of 2020, according to the IMF’s Currency Composition of Official Foreign Exchange Reserves (COFER) survey. Some analysts say this partly reflects the declining role of the US dollar in the global economy, in the face of competition from other currencies used by central banks for international transactions.’ 

Cryptocurrency is Self-Help

Countries around the world are embracing crypto regulations to encourage growth and provide an alternative avenue to their citizens. Americans are finding crypto assets as an investment hedge as crypto assets are slowly gaining mainstream appeal. 

Crypto regulation is welcomed by the crypto community but it must be backed by the right policies. Regulation should never be used as a tool to pander to irrational fears. 

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