US congressional committee to weigh cryptocurrency bill

Author: Hannah Lang, REUTERS; Compiler: Songxue, Jinse Finance

** A key congressional committee will vote this week on several bills aimed at creating a regulatory framework for cryptocurrencies, a milestone in efforts on Capitol Hill to codify federal regulation of the digital asset industry. **

The crypto industry has been in the spotlight of regulation since the sudden collapse of Celsius Network, Voyager Digital, FTX and others left investors with losses last year.

** Legislation planned to be considered by the House Financial Services Committee includes a bill that would define when cryptocurrencies are securities or commodities and another bill that would establish a system to regulate stablecoins — which are often backed by traditional assets such as the U.S. dollar. support. **

The legislation was debated and put to a vote, paving the way for a full House vote — the first time a crypto regulation bill has gone to a vote in Congress, a victory for crypto lobbyists pushing lawmakers to provide regulatory clarity to the industry.

Kristin Smith, CEO of the Blockchain Association, said: “Obviously, we’ve had some important decisions from the courts in the past, but this is by far the most important legislative moment we’ve ever had. "

It remains to be seen, however, whether the bills will gain Democratic support, which many see as crucial to their eventual passage into law.

The measures could also face obstacles in the Democratic-led Senate, where Senate Banking Committee Chairman Sherrod Brown said he was unsure whether additional legislation would be necessary to regulate cryptocurrencies.

Patrick McHenry, the committee's Republican chairman, said his top priority is to advance a new cryptocurrency market structure bill that would expand the Commodity Futures Trading Commission's (CFTC) oversight of the cryptocurrency industry while Clarify the SEC’s jurisdiction,** as many crypto advocates complain about the agency’s overreach. A Senate committee is expected to consider the bill on Wednesday, while the House Agriculture Committee is expected to consider it on Thursday.

The bill has galvanized many in the crypto industry, who say it could gain a seat in the Senate with Democratic support.

“For anything to be sticky, you need some bipartisan support,” said Miller Whitehouse-Levine, chief executive of the DeFi Education Fund, a lobby group focused on decentralized finance.

Clarity of Tokens

Cryptocurrency companies were initially in a regulatory gray area, but the SEC has steadily asserted its authority over the industry, considering most cryptocurrencies to be securities and subject to its investor protection rules. The effort escalated last month when the U.S. Securities and Exchange Commission (SEC) sued cryptocurrency exchanges Coinbase and Binance for failing to register certain crypto tokens. But both deny the allegations.

Most cryptocurrency companies have disputed the SEC's jurisdiction and in recent months have urged Congress to write clarification laws that make cryptocurrencies more akin to commodities than securities.

It was unclear whether any Democrats would support the market structure bill, including Rep. Maxine Waters, the Democratic leader on the Financial Services Committee.

** Lawmakers will also consider a bill on Thursday that would have the Federal Reserve set requirements for issuing stablecoins while retaining the authority of state regulators. **

The bill was amended to address concerns among some Democrats, including Waters, that issuers of stablecoins could evade stricter regulation by choosing to be regulated under state authority.

While McHenry said in an interview with Politico this month that he still hopes he and Waters can come to an agreement on the bill, he also said that a federal stablecoin regime "is not necessary," adding that national frameworks already exist. in place.