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The House Financial Services Committee in the United States is set to vote on several bills this week to establish a regulatory framework for cryptocurrencies. This marks a significant milestone for Capitol Hill as it aims to create federal oversight for the digital asset industry.
The cryptocurrency industry has come under regulatory scrutiny following incidents of sudden collapses of companies like Celsius Network, Voyager Digital, and FTX, which led to losses for investors.
The bills scheduled for consideration include one that aims to define when a cryptocurrency should be classified as a security or a commodity and another that seeks to establish regulations for stablecoins – digital tokens typically backed by traditional assets like the US dollar.
These markups represent the first time that crypto regulatory bills will be put to a vote in Congress, a victory for crypto lobbyists who have been advocating for regulatory clarity in the industry.
However, it remains to be seen if these bills will receive bipartisan support, which is seen as crucial for their chances of becoming law. They might face obstacles in the Democratic-led Senate, where some lawmakers are uncertain about the necessity of additional legislation to regulate cryptocurrencies.
Representative Patrick McHenry, the Republican chair of the committee, has prioritized advancing a crypto market structure bill. This bill aims to expand the Commodity Futures Trading Commission’s (CFTC) oversight of the crypto industry while clarifying the jurisdiction of the Securities and Exchange Commission (SEC). Many crypto advocates have raised concerns about the SEC’s perceived overreach.
The market structure bill has gained significant attention from the crypto industry, as bipartisan backing could improve its prospects in the Senate.
Regulatory clarity on cryptocurrencies has been a longstanding demand from the industry. The SEC has been asserting its authority over the industry, considering most cryptocurrencies as securities and subjecting them to investor protection rules. Many crypto companies argue that they should be classified more as commodities rather than securities.
One of the bills to be considered would have the Federal Reserve establish requirements for issuing stablecoins while maintaining the authority of state regulators. The bill was modified to address concerns from some Democrats, including Representative Maxine Waters, about potential loopholes in oversight.
As the bills move through the committee and the House, the outcome will have significant implications for the regulatory environment surrounding cryptocurrencies in the United States.
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