Libertarians Should Support Clarity on Crypto Regulation

The CLARITY Act aims to bring clarity to the regulation of digital assets such as cryptocurrencies. Senator Rand Paul, known for his libertarian views, is expected to vote against the bill on September 15.

Paul's concerns are rooted in a healthy suspicion of financial regulators and their power over commerce. However, the author argues that this bill is an exception where new federal frameworks actually limit government power.

The current regulatory landscape for digital assets is based on enforcement rather than clear rules. The SEC decides after the fact which companies comply with regulations, leaving entrepreneurs to guess what is allowed.

The CLARITY Act would write down the rules for the crypto industry, drawing jurisdictional lines between the SEC and CFTC. This would provide regulatory certainty and constrain government power by making it clear what is legal before investing or building.