On Friday, Maryland’s Delegate Adrian Boafo and New York Assemblyman Clyde Vanel reached out to Democratic Congressional leaders with a strong message: it’s high time to push for comprehensive federal legislation on cryptocurrency. They specifically pointed to New York State as a trailblazer in crypto regulation, suggesting its BitLicense could serve as a template for national policy. The letter also highlighted New York’s recent two-year pause on proof-of-work crypto mining powered by fossil fuels, hinting that Congress might want to consider similar measures.
Reading through their letter, it’s evident that some Democrats are floating crypto policy ideas that arguably lack foresight. This became even more apparent when reflecting on former Vice President Harris’s October 2024 proposal, which seemed to target crypto regulations that specifically protect Black men investing in digital assets. While protecting all groups is crucial, singling out one group might not be the most effective way forward.
Let me be clear: I support a regulatory framework that protects everyone’s right to invest in cryptocurrencies—regardless of race, gender, or background. But creating policies like New York’s BitLicense at the federal level, or enforcing a mining moratorium on operations using fossil fuels, could be more detrimental than beneficial.
This subject hits home for me, living in New York and witnessing firsthand the hurdles local regulations have placed on the crypto industry.
Understanding the BitLicense
New York mandates that virtual currency businesses obtain a BitLicense to operate within the state. At first glance, getting a license might not seem like a big deal. Yet, the process can take months or even years and might cost companies more than $100,000 just to navigate the bureaucracy. This daunting system discourages many established players, not to mention startups, from even trying.
Due to the BitLicense, New Yorkers find themselves blocked from using reputable platforms like Strike, River, Swan, and Kraken. They can’t even leverage services like Lightning on CashApp or the fiat-to-bitcoin exchange on Fold. The restrictions are quite extensive.
Adding to the frustration, New York residents attempting to access these platforms often see messages bluntly stating the restrictions alongside places like Iran, Syria, and North Korea—hardly the company New Yorkers wish to keep.
Imposing a BitLicense nationwide would severely stifle innovation and entrepreneurship. Established companies with resources might manage, but it would create barriers for new players, undermining efforts to make the U.S. a cryptocurrency leader.
The Idea of a Mining Moratorium
I understand the concerns about fossil fuels and their environmental impact, and I believe in climate change. But it’s also vital to balance these concerns with economic growth and job creation, something historically lacking in upstate New York since the post-WWII era factory shutdowns.
Today, jobs there are often low-paying service roles, insufficient for many to make ends meet. The decay in these urban areas is disheartening. Welcoming Bitcoin mining could offer a turnaround. While such operations may initially rely on fossil fuels, the push for renewable energy could eventually drive cleaner practices.
Assemblyman Vanel and Governor Kathy Hochul, if steadfast in their environmental convictions, might ask why not extend the moratorium beyond Bitcoin miners to all fossil fuel users? Why not overhaul the state’s transportation to eliminate combustion engines?
The rhetorical nature of these questions underscores the performative aspect of the current moratorium. If their true aim was environmental preservation, broader actions would be necessary, albeit with significant economic impacts.
Should a similar moratorium be adopted federally, it risks putting Americans out of work and shifting mining operations—and the associated economic value—to other nations.
A Call to Action for Democrats
I urge Democratic leaders to reconsider regulations that could stifle a sector capable of providing quality jobs to many Americans. Moving away from outdated views and instead aligning with forward-thinking politicians like Congressman Ro Khanna, Ritchie Torres, and former Congressman Wiley Nickel could pave the way for a thriving crypto industry in the U.S.
These leaders envision a future where cryptocurrency can flourish and provide valuable opportunities across the nation. Let’s take note from them and steer the conversation towards a balanced, inclusive, and innovative future for crypto in America.
