A new law grants the United States president sweeping powers to block access to digital assets, drawing significant concern
Oh really!
Looks like off the heels of preventing banks from custodying crypto, the Biden admin has chosen violence with this new unprecedented law that would give the powers that be the ability to simply ban individuals from using it. This is a bit weird for a couple of different reasons but definitely speaks to this administration's concentrated effort to play obstructionist when it comes to crypto.
What does that even mean?
Under the new law, the president can block transactions between U.S. persons and foreign entities identified as supporting terrorist organizations.
The language of this law is being fed into a bill designed for "anti-terrorist" financing, but we all know how that can go. Granting sweeping powers because of an "emergency" often leads to permanent powers that get constantly abused for whatever the reason might be. I must admit it feels a bit odd that the Treasury would be running around banning this or that individual from making crypto transactions. That's just such extreme micromanagement and not in line the normal line of top-down regulation, which is why I'm going to take this one a bit more seriously than I normally would.
It’s hard to see how this isn’t intended to be a user-level ban power by the President
But again, what does that even mean? The entire presumption here is that at some point the money is flowing through channels that the USG can control. What if they can't? Are they just blowing smoke and acting as though they have more power than they actually do? It's possible but a rule like this could make life pretty difficult for anyone trying to tread the line between crypto and legacy finance.
This includes imposing strict conditions on foreign financial institutions maintaining accounts in the U.S. if they are found facilitating such transactions.
So... crypto sanctions?
Basically making threats against institutions outside the U.S. but have valuable connections and networks within it. The vibe here seems to be "do what we say or we'll cut you off". Makes sense but it's hard to imagine this actually being an effective strategy. If the money can't pass through this or that path won't it just take the one of least resistance? While I hate to see this type of overreach it does tend to force a decentralized solution that nobody can control. We'll see if that theory becomes a reality... not that I'm advocating the funding of terrorism or anything but the definition of such crimes is a very quickly moving target it seems.
Breathtaking scope and implications
What's the definition of a "digital asset"?
Meh don't worry about it, friend!
It's whatever they say it is.
Move could be seen as an effort to exert control over digital assets under the guise of combating terrorism.
Wouldn't be the first time.
At this point I'm well versed in these tactics of distraction. Especially fear-based ones such as this. The frog boils slowly. First they use it for its intended purpose but then slowly expand the power to creep further and further if possible. Will it be possible? Unclear.
Of course this bill hasn't even passed into law yet so all of this is jumping the gun a bit, especially during an election year when there seems to be a very significant chance of the Biden admin getting kicked to the curb. We also have no idea how much political power can be attained by crypto users themselves. Having more money seems to have that affect, so we won't truly understand these dynamics fully until 2025 rolls around in all its glory.
Conclusion
The language used in a bill such as this is honestly a bit baffling. You're just going to try and ban people from using a permissionless system? I mean we knew this was an inevitable outcome but seeing it put to paper is something else entirely. How are they actually going to enforce this... assuming it passes into law. Perhaps the reporting on the law is just as hysterical as the law itself, and not in the funny way. Either way it's something to keep a serious eye on. Bottom-up regulation would be a very bad omen.