Cryptocurrencies

Democrats in the US House of Representatives will not have to vote against two bills

Democrats in the US House of Representatives will not have to vote against two pro-crypto bills expected to come to a vote this week – despite being strongly urged to do so.

A May 20 email from Democratic Party leaders to House members, shared by Politico, shows the party did not urge members to vote “no” on the Republican-led Financial Innovation and Technology Act for the 21st Century (FIT21) and the state anti-surveillance law. On Central Bank Digital Currencies (CBDC) – HR 4763 and HR 5403 respectively.

Both projects were seen as positive for the cryptocurrency industry if passed.

FIT21 would, among other provisions, strengthen the process of classifying whether a cryptocurrency is a commodity or a security, mostly handing over regulatory control of the sector to the Commodity Futures Trading Commission.

The US cryptocurrency industry and lobbyists have supported the bill, with 60 companies urging the House of Representatives to pass it in a letter dated May 16.

On the other hand, the CBDC Act will prevent the Federal Reserve from issuing central bank digital currency (CBDC).

However, the email noted that Reps. Maxine Waters and David Scott “strongly oppose” FIT21 while Waters opposes the Central Bank Digital Currency Act.

Politico later obtained a letter from the duo urging a vote against FIT21.

“I’m told House Democratic leaders said today they will not attack the cryptocurrency bill introduced by House Republicans,” Politico reporter Eleanor Mueller wrote on X in reference to FIT21.

source: Eleanor Muller

In the email, Democratic leaders objected to parts of the bill, including creating a process for trading digital goods on the secondary market if they are “initially offered as part of investment contract securities” as defined by the SEC using the Howey test.

“This language undermines decades of legal and case law, creating uncertainty in our traditional securities market,” the email said.

The leaders also argued that the bill “weakes investor protections and opens the door to fraud and market manipulation” by providing a “safe harbor” where certain entities can file an intent to register “and effective protection” for them from the SEC until it is finalized and the CFTC (CFTC). Encryption rules.

Related: A bipartisan bill on blockchain competitiveness is moving through the US House of Representatives

Meanwhile, the Anti-Central Bank Digital Currency (CBDC) Surveillance Act would prevent the Federal Reserve from issuing central bank digital currencies (CBDC), including in pilot programs.

Democratic leaders argue that stopping CBDCs would hinder the “priority of the US dollar” as other countries looking to evade sanctions move forward with their own CBDCs.

“According to the Congressional Budget Office (CBO), the overly broad definition of CBDC in the bill raises concerns that the bill could undermine the Fed’s ability to conduct monetary policy,” the email said. “Particularly troubling as it tries to navigate a soft landing with respect to inflation.”

Discussion and approval of FIT21 is expected to take place on Wednesday, May 22, according to Politico’s Mueller.

magazine: Fear and doubt among lawmakers is the motivation behind proposed cryptocurrency regulations in the United States

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