Bitcoin, Pot Ripe for Congressional Action — (Don’t Hold Your Breath)

Photograph by Jin Lee/Bloomberg

An attendee during the Inside Bitcoins conference in New York on April 7, 2014.

Bitcoin and marijuana are among the issues on which Congress should provide clarity — though probably won’t this year — Rep. Jared Polis says.

“In general, it’s better for Congress to reasonably consider these things and provide a uniform statutory approach rather than a haphazard approach from the administration,” Polis, a Colorado Democrat, said at a Bloomberg Government breakfast in Washington today. “Whether that happens or not is more of a challenge; it’s a challenging environment for lawmaking.”

In the absence of congressional action, the rise of digital currencies such as bitcoin and state-legalized marijuana sales have forced federal regulators to try to apply laws enacted before their existence to nascent industries.

Lawmakers are divided on alternatives, with some advocating for wholesale prohibition while others, including Polis, have encouraged a regulated marketplace.

Polis purchased his first of the crypto-currency when he bought .02 bitcoin for $10 at a Capitol Hill event earlier this week. He said it’s “unlikely” Congress will move to regulate bitcoin in the 113th Congress, which runs through early January 2015.

Instead, guidance will come from President Barack Obama’s administration, which he said had been “thoughtful” in its treatment of the crypto-currency so far. The Internal Revenue Service has determined to treat bitcoin as property rather than currency for tax purposes, a decision Polis calls wiser.

Polis said he agreed with the Obama administration’s decision to make enforcement of federal legislation outlawing marijuana posession a low priority and effectively allow states to bypass the laws.

Colorado and Washington state have legalized the recreational use of marijuana, setting up a conflict with federal law that has complicated the growth of those industries.

“That’s the best the executive can do. We need to do better in terms of the statutory changes,” he said.

Polis has introduced legislation that would regulate marijuana similarly to alcohol, and another bill that would create a federal framework for taxing it.

Colorado’s nascent legal marijuana industry currently faces banking and possible law enforcement issues for growing pot, he said, “but nevertheless the industry is growing and succeeding in Colorado.”


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