U.S. House Democrats Encouraged to Reject Pro-Crypto Bills Amid Regulatory Concerns
Summary:
Democrats in the US House of Representatives are being encouraged, but not required, to vote against two pro-crypto bills, the FIT21 Act and the CBDC Anti-Surveillance State Act. The former aims to clarify the classification of cryptocurrencies and shift regulatory control to the Commodity Futures Trading Commission, while the latter seeks to limit the Federal Reserve from issuing a Central Bank Digital Currency (CBDC). The bills have been met with resistance from certain representatives, who argue that they could destabilize the traditional securities market and weaken the dollar. The congressional vote on the FIT21 is expected on May 22.
Democrats in the United States House of Representatives have not been mandated to oppose two anticipated pro-crypto bills due for a vote this week, although they've been encouraged to vote against them. As revealed by POLITICO, a May 20 communique from Democratic Party figureheads to House representatives didn't explicitly instruct members to reject the Republican-initiated Financial Innovation and Technology for the 21st Century (FIT21) Act and the CBDC Anti-Surveillance State Act - H.R. 4763 and H.R. 5403 respectively. Both legislative proposals, if enacted, could positively impact the growing cryptocurrency sector.
FIT21 seeks to clarify the classification of cryptocurrencies as either commodities or securities and transfer regulatory oversight to the Commodity Futures Trading Commission. The bill has garnered support from both the US crypto industry and advocacy groups, with a concerted push from 60 firms in a letter dated May 16. On the contrary, the CBDC Act is designed to restrict the Federal Reserve from introducing a Central Bank Digital Currency (CBDC).
Despite this, memos reveal that Representatives Maxine Waters and David Scott actively resist FIT21, with Waters also opposing the CBDC Act. POLITICO subsequently published a letter from the duo advocating a rebuttal of FIT21.
Eleanor Mueller, a POLITICO reporter, shared an email from Democratic leaders sharply criticizing certain aspects of the legislation. They expressed concern about how the bill breaks with established legal norms, thus jeopardizing the stability of traditional securities markets. Additionally, leaders argue that the proposed bill compromises investor protections and increases susceptibility to fraud and market manipulation.
Furthermore, the CBDC Anti-Surveillance State Act, which prohibits the Federal Reserve from circulating a CBDC, was targeted by Democrat leaders. They contend that hindering CBDCs could potentially weaken the "supremacy of the U.S. dollar" as nations aiming to evade sanctions are proceeding with their own CBDCs.
According to the Congressional Budget Office (CBO), the act's wide-ranging definition of CBDC could infringe upon the Federal Reserve's monetary policy authority, especially during inflationary periods.
POLITICO’s Mueller forecasts that the FIT21 debate and vote will occur on Wednesday, May 22.
Published At
5/21/2024 5:54:05 AM
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