Sunday, February 5, 2023

Congress Members Want to ‘Validate Bitcoin’ – Whatever That Means

Congress Members Want to ‘Validate Bitcoin’ – Whatever That Means

Three members of the U.S. Congress are drafting legislation to protect digital currencies from government interference, according to a political news site. However, seasoned Bitcoin users may be skeptical of what that entails. Are legislators planning to introduce a new, U.S. federal government-approved cryptocurrency?

Also read: Credit Cards, PayPal, Even Coinbase Are Cutting off ‘Extremist’ Groups

News site The Daily Caller yesterday published a story titled “Congress Considering Validating Bitcoin”.

US CongressIt reported that three unnamed GOP Congress members were looking at something it called “AML Bitcoin”. It added the group is “working on legislation that would provide protections to currencies if they meet certain minimum conditions on preventing the currencies from being used by terrorists, drug traffickers, and others engaged in unlawful business practices.”

The Congress members reportedly asked not to be identified, to prevent interference from forces opposed to digital currency. “AML” typically stands for “anti-money laundering”, and is a common expression in banking and financial regulation.

Those details likely raise a few red flags in the Bitcoin community. It’s not certain if the Daily Caller’s source is even accurate, but we’ll assume for the moment it is.

Non-technical media outlets also have a tendency to use the word “Bitcoin” and its imagery in any story that deals with blockchain or digital currency issues. The Daily Caller refers to Bitcoin, its price and history several times in the article, without actually connecting it to the rumored legislative plan.

What Could ‘AML Bitcoin’ Be?

There’s little information about what “AML Bitcoin” actually is. A website of that name details a cryptocurrency linked to a project called “Aten Coin”. Aten Coin, AML Bitcoin and another token called “Black Gold Coin” have supposedly been around since 2015, but no listings for those names appear on CoinMarketCap or CoinGecko.

The site also lists a number of Aten Coin’s “achievements”, including membership of the U.S. Federal Reserve Faster Payment Taskforce Committee. That organization does list a Carl Weir of Aten Group Ltd. as a Participant. It also claims to be a Platinum Service Member of the American Bankers Association, though we couldn’t find a listing for that name there.

Despite the name, “AML Bitcoin” does not appear to share any technology with Bitcoin, and is not a fork of that original project. Aten Coin is overseen by NAC Foundation LLC, a Nevada-registered company.

Bitsonline has reached out to Aten Coin to enquire about its projects, and ask if it is connected to the Daily Caller story in any way.

Plans for an Official, Digital Dollar

Anyway, back to the original article — its source refers to one Republican senator and two Republican House members are looking to push new digital currency legislation when Congress reconvenes in September. It added:

“The center piece of the plan is to mainstream digital currency so it can be treated just like the American dollar. First, there is a new entity that is considering issuing a brand new digital currency that is compliant with anti-money laundering laws unlike any other in circulation.”

Whether the legislative plans are real or not, it appears they have nothing to do with Bitcoin. Bitcoin’s open and leaderless nature means it could not comply with the conditions listed — current rules regulating Bitcoin use cover only exchanges and other fiat gateways, and not the currency itself.

Not Bitcoin, but Could Have Implications

Cash paper moneyA U.S. government-approved cryptocurrency could have interesting implications. It could either lead to greater acceptance for existing open currencies like Bitcoin and Ethereum, or it could further marginalize them. It could divide digital currencies into “compliant” and “non-compliant” categories.

Ecuador (where the USD has been official legal tender since 2000) announced it would create its own digital currency in 2014, and “banned” alternatives like Bitcoin. However the new currency is little more than a digitized USD (pegged 1:1 in value) and its existence has done little to stop Bitcoin use in the country. Nearly half the population has no bank account of any kind, and most simply use physical cash.

At this stage, it seems unlikely that any government or central bank will officially recognize a digital currency it doesn’t control. If Bitcoin continues to gain value and mainstream acceptance though, watch for more efforts to regulate or replace it.

Do you think these plans have a chance to change anything? Let’s hear your thoughts.

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