Sen. Cynthia Lummis (R–Wyo.) might not seem like your typical cryptocurrency owner. She’s 66 and doesn’t have a tech background, but she’s “in it for the distance.”
Bitcoin emerged just a dozen years ago, when a pseudonymous hacker (or group of hackers) shared a nine-page paper on an obscure email list. Today, it’s the third-largest currency on the planet, according to Deutsche Bank. The total stock of bitcoins is capped at 21 million, which means that, unlike most paper money, no central bank has the power to print more of it. That’s one reason Lummis owns the digital currency—as a hedge against hyperinflation.
As they rise in popularity and value, however, cryptocurrencies such as bitcoin are increasingly under fire. The use of fossil fuels for bitcoin “mining” prompted Elon Musk to stop Tesla from accepting bitcoin payments in June. A month earlier, after the Colonial Pipeline suffered a ransomware cyberattack where hackers demanded payment in bitcoin, critics called for bans on the supposedly untraceable cryptocurrencies that they claim are favored by criminals.
But cryptocurrency backers still see the value of the nascent industry—not just as an investment but as a means to greater privacy and faster online transactions. This is especially important in less free economies. As Lummis says, “It provides great freedom to people who are living in hyperinflation or repressive governments.”
At this June’s Bitcoin 2021 Conference in Miami, Reason’s Nick Gillespie spoke with Lummis about common bitcoin myths, why cryptocurrencies are on the rise, and what all of that has to do with both major political parties abandoning fiscal restraint.
Reason: You’re a leading light on crypto in Congress. What do you see as the value of this new technology, especially as it intersects with a fiat currency system that has really gone off the rails?
Lummis: I had been my state’s treasurer in Wyoming. I was always looking for a store of value, and I see bitcoin specifically as a great store of value. Only 21 million will ever be developed. We know that scarcity will protect its value going into the future, unlike the U.S. dollar that we’re printing more of every single day.
Is bitcoin, or cryptocurrency more broadly, a competitor to the U.S. dollar?
It’s not a competitor, but it’s an alternative saving instrument for people who, like me, are concerned that the U.S. dollar saved will be worth far less than when it’s deposited in savings. So I see it as an opportunity to save for my future in something that will grow in value, not fall in value.
Do you own bitcoin or other crypto?
OK. Are you cashing out or are you long on bitcoin?
Oh, I’m what they call a HODLer. I’m long—I’m in it for the distance.
You’re working to bring a legislative agenda around crypto into fruition. What’s the regulatory framework that you want to see crypto being used under? Currently, it basically is treated as a private commodity, so it’s subject to things like the capital gains tax. Where do you see things going? What’s your dream vision?
It is to create a regulatory and statutory framework—a sandbox if you will—where innovators know the parameters, but the parameters don’t constrain them in their innovation as they develop new uses, new tools, new opportunities. The blockchain will provide, for example, the opportunity to put both contracts and the money or value associated with that contract on the blockchain. It cannot be adulterated or have there be a miscommunication about what the contract entails. It makes a secure framework. And we want to make sure that legislation protects that and doesn’t stifle innovation.
So you want to have a clear, predictable, stable set of rules in place, and that way people can kind of get on with the business of building a crypto world.
That’s correct, Nick.
What’s the timeline for that, and where are the main sticking points? Is it mostly that people in Congress have no idea what you’re talking about, or is it that they’re like, “I don’t like this because it might hem in my ability to keep printing money”?
Right now, [the problem is] the lack of understanding or knowledge about what the distributed ledger is. What bitcoin is, what blockchain is—it’s a total mystery to most members of Congress. So the first part is going to be to inform, educate, bring in experts who can help explain the importance of this.
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