Recent reports have revealed that Democratic Party leaders have opted not to vote on two pro-crypto bills in the upcoming vote. This seemingly positive development comes alongside the recent 180-degree turn the Biden administration appears to be taking in the cryptocurrency space.
House Democrats don’t have to vote no
According to an email sharing According to Politico, Democratic Party leaders have not urged its members to vote against two pro-crypto bills expected to be introduced in the House of Representatives soon.
The Whip Question revealed that Democratic leaders expect bills HR 4763 and HR 5403 to be introduced this week. As a result, they presented their problems with the bills, even if they did not force House Democrats to vote against them.
Bill HR 476, or the Financial Innovation and Technology for the 21st Century Act (FIT21), provide a new regulatory framework for the industry. If passed, FIT21 would establish the Commodity Futures Trading Commission (CFTC) as the primary regulator of cryptocurrencies and clarify whether a digital asset is a security or a commodity.
According to the email, Democratic leaders believe the bill contains language that “undermines decades of legal precedent and case law, thereby creating uncertainty in our traditional securities market.”
FIT21 would also provide a “safe harbor” to entities that would “protect them from SEC rules and regulations until the SEC and CFTC finalize their rules,” effectively “weakening” investor protections against fraud and market manipulation.
Regarding the CBDC Anti-Surveillance State Act, or bill HR 5403, the Democratic Party believes that it “would have broad negative consequences”. The impact includes “impeding the primacy of the US dollar” and undermining “the ability of the Fed to conduct monetary policy”.
For this reason, Ranking Members Maxine Waters and David Scott strongly oppose the legislation, posting a “Dear Colleague” letter on FIT21 specifically and urging Democratic representatives in the House to vote “no.”
Of note, the American Bankers Association (ABA) urged House Representatives to support the bill HR 5403. On Monday, the ABA published a letter supporting the bill.
The association believes that a central bank digital currency (CBDC) is not necessary and “would present unacceptable risks and costs to the financial system”. Additionally, the ABA asserts that it would fundamentally alter the relationship between citizens and the Federal Reserve, undermining “the important role that banks play in financial intermediation.”
Political journalist Eleanor Mueller revealed that the floor debate and adoption of the bills would be set for Wednesday, May 22.
Is the US government not changing crypto regulations?
The US government’s crackdown on cryptocurrencies has created a unclear and uncertain landscape for the crypto industry. In addition, the strict and sometimes “excessive” rules approach against the sector has been heavily criticized by prominent community figures and politicians.
Government surveillance is intensifying as the November election approaches. This has apparently prompted the Biden administration to take a more strategic approach to crypto.
As reported According to Bitcoinist, experts consider that this change could be a response to Trump’s endorsement of cryptocurrencies. The Republican candidate and former president received a positive response from the crypto community for his support of digital assets.
Additionally, pressure from the community and key political figures calling for clearer regulations and a more welcoming landscape has put the U.S. government “on the defensive,” as noted by Sam Lyman, director of public policy at Riot Platform.
Ultimately, the industry’s efforts should continue despite recent victories. Dave Weisberger, President of CoinRoutes said“Now is NOT the time to be complacent.”
Total crypto market capitalization is at $2.55 trillion in the weekly chart. Source: TOTAL on TradingView
Featured image from Unsplash.com, chart from TradingView.com
