GMU Scalia Law professor J.W. Verret explains why Sens. Elizabeth Warren and Roger Marshall are wrong to use Hamas’s recent brutality as justification for their misguided efforts to regulate cryptocurrency. Two slices:
There’s no evidence that crypto is used more often or more effectively than the traditional banking system to finance terrorism. Hamas acquired crypto on transparent blockchains, not via private blockchains and crypto privacy tools such as Monero or Zcash. Hamas used bitcoin and Tether, which are both traceable and easily frozen by exchanges. In fact, the terrorist organization stopped soliciting crypto donations precisely because they were so easy to trace.
The crypto-privacy tools that Sens. Warren and Marshall are targeting have limited transaction capacities. That makes them ill-suited for the kinds of large-scale transfers that the Treasury Department would have an interest in interrupting. So it’s a mistake to associate these tools with Hamas’s fundraising efforts.
Furthermore, the Warren-Marshall bill offers no pathway to compliance, aiming instead to make the very idea of crypto privacy impossible. By proposing an outright ban on crypto privacy tools, the legislation undermines the utility of cryptocurrency as a secure and private medium of exchange. Imagine if every time you bought a cup of coffee your entire financial history was laid bare for anyone who wanted a peek. This would be an obvious breach of your personal privacy, but it would also stifle crypto’s tremendous upside potential for society. Government tracking of individual dollar bills would undoubtedly help stop some criminal activity, but Americans wouldn’t tolerate it. This is no different.
The Warren-Marshall legislation is a wrongheaded attempt to curb a technology whose nuances remain poorly understood in Washington. It’s a Trojan Horse promising stronger national security that would in fact be a gift to adversarial foreign governments, hackers and kidnappers. It contributes to the myths about cryptocurrencies and financial autonomy that bad actors tell the oppressed.
Therein lies the foundations for a more modest case for free trade in America. One pillar of such a case is the benefits that trade liberalization brings to American consumers in the form of lower prices for goods and services. Whether driven by alowering of tariffs on imported goods or, less directly, through associated productivity gains by domestic and foreign firms, the evidence for this result is overwhelming.
Importantly, such benefits are proportionately greater for less-wealthy American consumers. Their income does not only buy more when prices fall. People on lower incomes also tend to spend proportionately more on internationally traded goods like agricultural and manufactured products than richer Americans, who generally expend more of their income on goods like education that are less traded across borders.
Trade openness also provides American companies with greater access to markets in which to sell their products. The greater the likely market, the more the potential for sales and profits. The same trade openness brings more competitive pressure to bear upon the U.S. economy. Increased competition is a good thing: it promotes greater adaptability, more resilience, ongoing efficiencies, and incentives to work harder, be entrepreneurial, and lower costs while maintaining profit margins.
The idea that all racism is structural is deeply damaging because it makes it hard for institutions to open their eyes to forms of discrimination towards members of groups that are supposedly dominant. In practice, it is made even worse by the fact that many people on the left have now embraced a very simplistic notion of who is dominant and who is marginalized—one that imposes American conceptions of race onto situations in which they distort rather than illuminate underlying realities.