Bitcoin ban urged by Sen. Manchin, previously best known for a compaign commercial where he used a shotgun to shoot a copy of the Cap and Trade bill.
Senator Joe Manchin (D-WV) sent a letter to federal regulators demanding a ban on Bitcoin.
Should we be surprised? Well, as one particularly brilliant commentator stated:
“There has been a lot of news lately about the efforts of a variety of U.S. regulators to understand Bitcoin, and these regulators are not in the business of exempting financial products that compete with government issued currencies or act outside of the established financial regulatory environment. . .
As a result of all of the above, there is substantial expense and risk in using and accepting Bitcoins, as there should be a risk premium attached due to the very real possibility that the U.S. and other governments could shut them down.”
In addition, Bitcoin has been under review in the U.S. as well.
And now, we have a U.S. Senator urging an outright ban because Bitcoin is unregulated (which is arguable, but for reasons we don’t need to get into here).
As Sen. You-Kids-Get-Off-My-Lawn said, Bitcoin is:
“highly unstable and disruptive to our economy. For the reasons outlined below, I urge regulators to take appropriate action to limit the abilities of this highly unstable currency.”
He is also using the criminal use of Bitcoin as an excuse. He discussed the “deflationary nature” of Bitcoin, technical problems around Mt. Gox (which I cannot believe he understands in the least) and volatility as other reasons to ban it. He even trotted out the Consumer Price Index!
He also had to include a softball to “hard-working Americans” in his letter in his final hit:
“The clear ends of Bitcoin for either transacting in illegal goods and services or speculative gambling make me weary of its use. The Senate Homeland Security and Governmental Affairs Committee issued a report just this month stating, “There is widespread concern about the Bitcoin system’s possible impact on national currencies, its potential for criminal misuse, and the implications of its use for taxation.” Before the U.S. gets too far behind the curve on this important topic, I urge the regulators to work together, act quickly, and prohibit this dangerous currency from harming hard-working Americans.”
If the “clear ends of Bitcoin” are for illicit activities, why not put the risk of deflationary pressures and volatility on the persons engaging in such activities? Whatever.
Bitcoin’s pricing will smooth out once there is greater acceptance in the marketplace. It should not surprise anyone that a relatively new currency experiences volatility or that a new technology experiences some bugs. The early adopters will absorb the early losses, and changes addressing the early problems may generate the trust that allows for widespread usage.
However, as I have said from the beginning, the risk of Bitcoin lies not with technology or the vagaries of market pricing. The risk of Bitcoin lies with regulation. The U.S. government is not in the business of allowing non-government sanctioned currencies or payment channels to exist.
Sen. Marlboro Man gets tough with a pile of paper.