Crypto bans make strange political bedfellows
Why would some Americans ever want a blanket prohibition akin to China’s?
I think it’s fair to say that the category of stuff the Chinese Communist Party, JPMorgan Chase CEO Jamie Dimon, and uber-liberal U.S. Sen. Elizabeth Warren all agree on is vanishingly small. If you notice something that falls into it, probably a good idea to be intrigued, at least. Perhaps even deeply concerned.
Which brings us to the topic of banning cryptocurrency outright.
The Wall Street Journal ran a fascinating story Friday on crypto trading in China. As reporters Elaine Yu and Weilun Soon note, the country has banned all crypto trading and mining since 2021, officially making China one of the most restrictive jurisdictions in the world regarding crypto.
Unofficially, small investors in China have found all sorts of workarounds to the ban, executing as much as $90 billion a month in crypto trading volume recently. These include virtual private networks, exchange accounts opened prior to enactment of China’s ban, and illicit meetings in laundromats and cafes where people exchange cash and wallet addresses, according to the Journal.
The story also points out that China does still allow some on-chain activity, such as building applications and exchanging digital collectibles. The country’s central bank is even working on its own official digital currency.
In other words, private blockchain networks that can be supervised by the government are fine. What the CCP really has a jones for is digital currencies like bitcoin changing hands over open, public networks.
The Journal doesn’t say this part, but I would add that there’s another important word we could use to describe such networks: They’re inherently small-d democratic.
It’s thus no coincidence that tyrants like the CCP hate open, public networks. The open internet itself also fits this description, and we’ve seen for decades how CCP has tried to censor that system as well, with mixed results. For people building and using public blockchains, the party’s disdain should really be a badge of honor.
We should also find it odd that some people want a crypto ban similar to China’s imposed in a Western democracy like the U.S. They never quite make the comparison so explicitly, of course. They probably don’t even think of it in those terms in private.
But if you’re following the policies in both countries, the parallels are pretty obvious.
As Dimon flatly told the U.S. Senate Banking Committee last month, when tossed a softball question by Warren regarding crypto:
“If I was the government, I’d close it down.”
Warren’s response: “OK!”
It’s unlikely she could get such a sweeping law passed, mind you. Such a policy would also probably be ineffective and difficult to enforce in the U.S., just as it has been in China.
But still. It’s telling just to see such a mindset on display. Why should this even be the direction America wants to go?
This post was adapted from my free email newsletter #w3w. To get the full version in your inbox every Sunday, including additional headlines about decentralization from around the internet, please subscribe here.
