US Congress Committee Passes Historic Crypto Bill

In a landmark victory for the crypto industry, the US House Financial Services Committee has achieved a landmark victory by advancing a bipartisan bill aimed at establishing a regulatory framework for Bitcoin and cryptocurrencies yesterday. The bill’s passage marks Capitol Hill’s efforts to codify federal oversight for the digital asset industry, providing much-needed clarity and regulation for investors and the industry alike.

Landmark Regulation For The US Crypto Industry

The crypto industry has been under intense scrutiny since investors faced substantial losses last year due to sudden collapses of prominent companies like Celsius, Voyager and FTX. The bill passed by the House Financial Services Committee sets out to define whether a cryptocurrency should be classified as a security or a commodity, while expanding the Commodity Futures Trading Commission’s (CFTC) oversight of the crypto market.

Simultaneously, it aims to clarify the Securities and Exchange Commission’s (SEC) jurisdiction, addressing concerns over the agency’s perceived overreach, which has been a point of contention among crypto advocates. The SEC’s actions escalated a few weeks ago when it filed lawsuits against leading exchanges, Coinbase and Binance, accusing them of failing to register some tokens as securities.

One of the key proponents of the bill, Representative Patrick McHenry, the Republican chair of the House Financial Services Committee, expressed his determination to position the United States at the forefront of digital asset regulation, citing other countries such as the UK, the European Union, Singapore, and Australia, which have already taken strides in implementing clear regulatory frameworks for digital assets.

#WATCH: Chairman @PatrickMcHenry delivers opening remarks at today’s historic markup of comprehensive digital asset market structure legislation.

Read more 🔗https://t.co/7IyEcft8b1

📺 Watch his opening remarks 👇 pic.twitter.com/LHr3StwOXL

— Financial Services GOP (@FinancialCmte) July 26, 2023

The House Financial Services Committee’s markup, where the legislation was debated and brought to a vote, represents the first time a crypto regulatory bill has undergone such a process in Congress. This achievement signifies a resounding success for the industry, who have tirelessly pushed lawmakers to provide regulatory certainty for the industry.

Remarkably, the bill has garnered considerable support from the crypto industry, and with backing from Democrats, it stands a good chance of making headway in the Senate. However, not all Democrats are in favor of the bill. Justin Slaughter, Policy Director at Paradigm, noted:

Ages of the six Democrats that voted for the bill: 35, 41, 47, 48, 50, 57 (average: 46).

Average age of the rest of the HFSC Democrats: 61.

More than anything else, age dictates Democratic Members’ views on crypto and whether legislation on crypto is needed.

Representative Maxine Waters, the top Democrat on the Financial Services Committee, vehemently opposes the legislation, arguing that it would create more confusion and provide fewer protections for consumers and investors compared to the current regulatory landscape. The bill’s journey through the Democratic-led Senate might also present challenges, as the crypto-critic and head of the Senate Banking Committee, Sherrod Brown, has expressed uncertainty about the necessity of additional regulation.

In addition to the landmark crypto bill, lawmakers are set to consider another bill that aims to have the Federal Reserve establish requirements for issuing stablecoins while preserving state regulators’ authority. The bill has been modified to address concerns from Democrats who feared that stablecoin issuers could potentially evade stricter oversight by opting for state-level regulation.

Voices From The Industry

Despite ongoing negotiations and differing views, the industry is celebrating the FIT for the 21st Century Act. Jerry Brito, executive director of Coincenter, celebrated the bipartisan passage, stating, “There’s a lot of good in the bill – most importantly it honors the rights of individuals to write and use cryptocurrency software.”

Coinbase CEO Brian Armstrong encouraged all to support the bill, emphasizing that it represents an essential step in securing regulatory clarity for the industry, protecting American innovation, and national security. He stated:

The bill will evolve during the legislative process, but a vote today for the Financial Innovation and Technology for the 21 Century Act is a vote to protect your crypto, American innovation, and national security.

Jake Chervinsky, chief policy officer at the Blockchain Association, lauded the passage of the bill as a historic day for crypto policy, underscoring the significant bipartisan support it received, which sends a strong message in favor of reasonable regulation for digital assets:

This is a historic day for crypto policy. The Financial Committee just advanced the FIT for the 21st Century Act by a vote of 35 to 15, including significant support from Democratic members.

Today, Thursday, the bill will get marked up by the House Committee on Agriculture Republicans and House Agriculture Committee Democrats and will advance to the House floor for a vote if it passes out of the House Agriculture Committee.

At press time, the Bitcoin price slowly grinds up, trading at $29,518.

Featured image from MIKE STOLL / Unsplash, chart from TradingViiew.com