Exclusive: Interview With Congressman Tom Emmer On Regulatory Clarity For Crypto Industry

Exclusive: Interview With Congressman Tom Emmer On Regulatory Clarity For Crypto Industry

Last Tuesday, I caught up with Congressman Tom Emmer (R-MN) to discuss the reintroduction of his Securities Clarity Act as a bill in the 117th Congress. Emmer is the #3 Republican in the House of Representatives, serving as Chair of the Republican National Campaign Committee (RNCC). He also happens to serve as a Co-Chair on the Congressional Blockchain Caucus and serves as the Ranking Member of the Subcommittee on Oversights and Investigations for Financial Services.

Congressman Darren Soto (D-FL) and Congressman Ro Khanna (D-CA) co-sponsored the bill with Emmer, and all three of the more influential organizations in Washington D.C., namely CoinCenter, the Chamber of Digital Commerce, and the Blockchain Association, provided their endorsement as well.

Emmer sat down for an exclusive interview with Forbes Crypto where he shared some of his thoughts on how the Fed Reserve Chair Jay Powell perceives cryptocurrencies, the way Congresswoman Maxine Waters (D-CA) excluded Republicans from serving on the newly formed “Digital Asset Working Group”, and the dangers he sees America facing from our enemies without cryptocurrency and blockchain innovation occurring in the U.S.

Jason Brett: We saw the Securities Clarity Act that you reintroduced a couple of days ago with two Democrats. You [first] introduced it last year. It comes at such an interesting time with the debate about what’s a security and what’s not a security. What are your thoughts on this debate?

Congressman Tom Emmer: Let’s go back Jason. You and I met four or five years ago at the Chamber of Digital Commerce [and] you might remember that I was complaining about this then. What’s missing is a clear definition of what is a currency and what is a commodity and what is a security. Now do I ever think that we are going to have this in black and white? There is always going to be a little gray somewhere in there. But the idea that the Howey test which was created under a completely different set of circumstances somehow should apply to this entrepreneurially charged area is to me just full employment for lawyers as opposed to giving entrepreneurs the best opportunity to take risks - calculated risks - and create new opportunities for themselves and others.

The Securities Clarity Act literally is an attempt to try to do this. You should default most of the time that a token on its own is not a security. It would be really good if we can have that kind of clarity in the environment now. If it is part of an investment contract and there are some details then it would fall under the purview of the SEC. All we’re trying to do Jason in this area and others is provide a little bit more clarity and certainty with government in the market place because, look, the worst thing you can do is lay the wet blanket of government over this emerging area that frankly a lot of people are going to with or without government. Maybe that’s the warning sign. This is going to happen. People are going to continue to move in this direction because cryptocurrency and everything that comes with it is a response to too much government.

Brett: I have to ask- because I saw you tweet about this- but I’d love to hear from you directly. There was this ‘Digital Asset Working group that was set up. It looks like it was Democrats only. I know you had mentioned about that. I’ve been in this for five years- I’ve never seen cryptocurrency as a partisan issue. Can you shed light for the readers on why the Democrats alone want to proceed with talking to regulators without the Republicans there?

Congressman Emmer: And let’s back up. I think it’s an issue where the government and big banks are opposed to it because it literally allows individuals on a peer-to-peer open source network to complete transactions between one another without the strong arm of government or some other third party intermediary getting in between them. Republicans believe in the ability of people to exercise their Constitutional amendments of freedom of speech, freedom of association, freedom of travel- all those wonderful things that this country is based on.

Cryptocurrency, I’ve told you already, this whole area is a reaction to too much government. When you’ve got payment processors out there kicking people off their platform because they disagree with their political platforms, when you have the potential for credit card processors, major banks, etc. deciding who is going to get credit and who is not based on perhaps how they exercise their second amendment rights or the business that they are in, or they are going to start to tell you my Gosh, Jason, you are a smoker we can’t have you buying those cigarettes anymore so we’re not going to give you a platform for this transaction. That’s the biggest danger that we have going. I think Democrats are on the wrong side of this issue, especially the big government socialists that have taken over. You find it interesting that Rashida Tlalib who is anti-everything to do with the financial system is suddenly pro some type of crypto whatever it is. No she’s not. They’re on the wrong side of this.

What Maxine Watters did a few weeks ago by creating a Digital [Asset] Working Group with only Democrats on it is first, unheard of. You should be working together for these solutions as opposed to just taking one side or the other. I’m going to tell you Jason my position is [that] we are with the entrepreneurs that are working in this area- innovating, creating, exploring the opportunities that people get because they can transact business peer-to-peer as opposed to having a third party intermediary. Democrats…are opposed to that. They want to have control over your decisions. And by the way if your free speech disagrees with what they think free speech is, they want the ability to shut you down. And I think that’s what’s so dangerous. It’s happening already. We had two major payment processors that announced after the January 6th incident- which by the way nobody should try to condone- it was a tragic thing that happened. That being said, you have 147 who voted not to certify and [Paypal and Stripe]…literally said they were not going to process contributions. That’s the danger.

If you are truly going to live in a free society you don’t have to agree with what someone else is saying. But that’s that spirit of debate that frankly we’ve celebrated in this country up until now. This is very dangerous. She created a very partisan Digital Working group when she has already got an Artificial Intelligence working group going, she’s already got a Fintech working group going with Republicans and Democrats. You have to be a little suspicious why you would create a completely separate entity on this topic with only people on your side of the aisle- it doesn’t send the right message to me.

Brett: I remember Republicans were part of her trip around Libra. There were people on both sides of the aisle on that. What has changed is the evaluation of Libra vs. where we are today.

Congressman Emmer: This goes to our Central Bank Digital currency discussion- Libra….when you have a closed platform, whether it’s Facebook and Mr. Zuckerberg or it’s Jay Powell and the Federal Reserve controlling the digital currency, you don’t have a great situation. Really- postal banking? This is where they want to go. This is not to offend all the great Postal Workers we have through the country but would you want your healthcare delivered through the Postal Service? Why would you want your financial services delivered through the Post Office unless of course it’s another way for the government to control what you and I are doing every day.

Brett: Along the lines of Central Bank Digital Currencies, what I hear you saying is something that there is no difference between what we’re watching in China about credit score, the new CDBC, how that can have command and control over citizens. And so I have to observe that that is frightening. That’s exactly what we’re talking about doing here. And so, what do you say when you hear the Fed Chair take a position that if we just introduce a CBDC all this cryptocurrency stuff will just go away, won’t have any value.

Congressman Emmer: First off, I think that’s extremely naïve for someone who is so educated and experienced. If that were true, we never would have had cryptocurrency in the first place. Cryptocurrency if you remember- Satoshi, the White Paper- it all evolved out of the 2008 crash because people thought we’re going to have to have a new mode of exchange because the US dollar is not going to survive this crash. Ultimately as I told you, this has evolved…it is growing and becoming more and more significant with each passing day because as a friend said to me recently it’s a complete counterweight to the enormous weight of the government and the attempt of the government to control. Do you really think- and I’m stealing this from a friend- that we should be following China? Do you really think that the United States of America that is based on free markets, that’s based on the right to self-determine without your government telling you who you can be, where you can go, and how you can grow- do you really think that happens in China because it doesn’t. I would think anything China puts out there is the direct opposite of what we should be advocating for in the United States. With all due respect to the Chair of the Federal Reserve, frankly this is going to happen with or without the United States Government. I think it’s better off that policymakers get involved now and try to help with a light touch regulation as opposed to more and more regulation. Let the entrepreneurs do what they do best- create. Remember our freedom in this country - the difference between us and every country around on the face of the planet- is our financial system. And the reason is that any dumb schlep like me can walk into a local community bank with an idea and create the next great big business. Think about it- Harley Davidson was started in a garage. Walt Disney was started in a garage. Amazon was started with nothing. That’s what this country is about. It’s not about government being able to control your debit card and tell you oh for goodness sake Jason and Tom, you are smoking, we’re going to have to limit your ability to do that because if you follow the science that’s good for your health and we are the overseers of all that is good. That’s not the American way. And I think the Fed Chair is going to find out- the entrepreneurs if they don’t do it here, they will do it elsewhere and it will continue to grow. So you might want to think about rethinking your approach. We’re all for a digital currency here as long as it has the same attributes as cash- permissionless, open.

Brett: I am very excited to see that you are accepting Bitcoin [for donations]…so the people I talk to a lot in the space I talk to on Clubhouse- the new app…one of the things that [is talked about] is a bitcoin ETF…Do we think and hope that a Bitcoin ETF might be in the cards at some point- is it better late than never?

Congressman Emmer: The answer is yes, but we’ve got all kinds of mixed messages. You mentioned some stalwarts. They’re on the cutting edge of this. It goes back to what I was telling you earlier. I don’t know how fluent some of the top people in our government are with what’s actually happening. So they make foolish, uneducated statements about cryptocurrencies, about the network itself. I think some of them still conflate or confuse blockchain with cryptocurrency. They don’t understand they are two completely different things and cryptocurrencies are simply using the blockchain to make this all happen. Yes, is the answer to your question but we really have to bring a whole lot of people along before we’re going to have that critical mass and movement, I think.

Brett: Thanks so much!