US Congress To Decide Fate With New Landmark Regulatory Vote
- Key US Congress committee to vote on landmark bills, establishing a regulatory framework for cryptocurrencies.
- The proposed legislation seeks to differentiate cryptocurrencies as securities or commodities and regulate stablecoins.
- Cryptocurrency industry awaits a crucial decision as Congress grapples with bipartisan support and potential hurdles in the Senate.
According to Reuters, a key US Congress committee is poised to vote on a series of bills aimed at establishing a regulatory framework for cryptocurrencies.
One of the proposed legislations aims to differentiate between cryptocurrencies categorized as securities or commodities, while another seeks to institute oversight for stablecoins – digital tokens typically backed by traditional assets like the U.S. dollar.
The cryptocurrency market has come under increasing scrutiny following the collapse of companies such as Celsius Network, Voyager Digital, and FTX, which left investors reeling from financial losses. In response to these incidents, the House Financial Services Committee will deliberate on various bills this week.
The forthcoming markups, where the legislation will be debated and voted upon, represent the first time that regulatory bills for cryptocurrencies have been presented before Congress. For cryptocurrency lobbyists, this is seen as a significant victory, as they have long advocated for regulatory clarity within the industry.
Kristin Smith, CEO of the Blockchain Association, expressed the importance of this legislative moment, surpassing prior decisions handed down by the courts.
However, the ultimate success of these bills may depend on garnering support from Democratic members of Congress, a crucial factor for their passage into law. While there is enthusiasm within the crypto industry about the potential for the market structure bill in the Senate, obstacles remain, particularly in the Democratic-led Senate Banking Committee. Senator Sherrod Brown, the committee’s head, has expressed uncertainty about the necessity of additional crypto regulations.
Representative Patrick McHenry, the Republican chair of the committee, prioritizes advancing a crypto market structure bill. This legislation would broaden the Commodity Futures Trading Commission‘s (CFTC) oversight over the crypto industry while clarifying the jurisdiction of the Securities and Exchange Commission (SEC). Many crypto advocates have raised concerns about the SEC’s perceived overreach, making this aspect of the bill particularly relevant.
The proposed market structure bill has sparked enthusiasm among crypto industry players, who believe that securing bipartisan backing is crucial for its success in the Senate.
The SEC has progressively asserted its authority over crypto companies, contending that most cryptocurrencies fall under the definition of securities and should be subject to investor protection rules. Last month, this effort intensified as the SEC filed a lawsuit against crypto exchanges Coinbase and Binance for allegedly failing to register some crypto tokens. The exchanges have denied these allegations.
One of the bills set for consideration on Thursday is designed to task the Federal Reserve with establishing requirements for issuing stablecoins, while also preserving the authority of state regulators. This bill was amended to address concerns from some Democrats, including Representative Maxine Waters, who worried that stablecoin issuers might evade stricter oversight by opting for state-level regulation.
Although Representative McHenry remains hopeful about reaching an agreement on the bill with Representative Waters, he has asserted that a federal stablecoin regime is not essential, given the existing state frameworks.
As the House Financial Services Committee prepares to vote on these bills, the crypto industry and its stakeholders eagerly await the outcome, hoping for a breakthrough in achieving regulatory clarity and stability in the ever-evolving digital asset landscape.