With 65 speakers packed into a single day, the third annual Bitcoin Policy Summit in Washington, DC, had no shortage of topics. Conversations spanned the legislative agenda in Congress, the role of Bitcoin mining in strengthening energy grids, and the ways human rights activists have benefited from using Bitcoin.
Yet, as the day went on, there were two themes that repeatedly surfaced. Again and again, people pointed out that both the Bank Secrecy Act and capital gains taxation are long overdue for reform.
Bank Secrecy Act
Not one to mince words, Representative Warren Davidson (R‑OH) told the audience, “The Bank Secrecy Act was a massive infringement on [financial privacy].” The congressman is right. At a fundamental level, the Bank Secrecy Act (and the laws that followed under it) deputized financial institutions as law enforcement investigators. They are required to identify customers, track their activity, and report those customers to the government should anything seem suspicious or unusual.
Some people may be sympathetic to this idea. After all, wouldn’t you call the police if you thought someone broke into your neighbor’s home? Or if you saw someone being kidnapped? The difference here is that although officials cite the need to fight terrorists and human traffickers, the vast majority of the reports filed (75 percent) are for nothing more than someone using $10,000 or more in cash. In doing so, this regime prioritizes mass surveillance of innocent people over the pursuit of real criminals.
When it comes to enacting change, the Bitcoin Policy Institute’s head of policy, Zack Shapiro, put it well when he said, “We need to rewrite our illicit finance laws to protect us against [real threats] while not undermining the ability to use peer-to-peer technology.” Yaël Ossowski, deputy director of the Consumer Choice Center, later pointed out that Senator Mike Lee (R‑UT) introduced legislation that could do just that. In short, Senator Lee’s legislation would repeal mandatory reporting, strengthen the Fourth Amendment, and even prohibit the creation of a central bank digital currency (CBDC).
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