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Highlights
- House to vote on HR 4763 and HR 1122 for crypto and CBDC regulation last week of May.
- FIT Act seeks SEC and CFTC shared oversight; Anti-CBDC bill blocks Fed digital currency.
- Emmer's Anti-CBDC bill faces Democratic opposition; no Democrats supported in committee.
House representatives are gearing up for a vote on two major bills of cryptocurrency legislation. The Financial Innovation and Technology (FIT) for the 21st Century Act and an anti-Central Bank Digital Currency (CBDC) bill, sponsored by Republican representatives, will be on the floor the last week of May.
As a result, this united vote is a landmark event in the governance and prospects of digital assets in the United States.
The FIT for the 21st Century Act and Anti-CBDC Bill
The FIT for the 21st Century Act, also known as HR 4763, is a broad bill that seeks to create a regulatory infrastructure around the cryptocurrency industry. It suggests splitting oversight duties between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
This legislation, which was approved by the House Financial Services Committee back in July, is aimed at tackling the changing digital assets and making market participants more transparent about it.
🚨SCOOP: The Financial Innovation and Technology (FIT) for the 21st Century Act, aka the comprehensive #crypto rules of the road bill from @HouseAgGOP and @FinancialCmte, is slated for a floor vote in two weeks time. Sources tell me the tentative plan is to combine…
— Eleanor Terrett (@EleanorTerrett) May 10, 2024
The anti-CBDC bill, identified as HR 1122 and introduced by Majority Whip Tom Emmer (R-Minn. ), seeks to prohibit the Federal Reserve from issuing a digital currency to consumers in the first instance. Emmer has criticized the privacy issues and government surveillance, arguing that the digital yuan will only deepen this problem.
The bill, however, was reported favorably out of committee in September and has received the support of conservatives apprehensive about a government-managed digital currency.
Bipartisan Challenges and Legislative Strategy
Merging the two bills into one rule resolution is perceived as a tactical maneuver to simplify the discussion and voting process. Nevertheless, this approach is associated with problems.
Whereas the FIT for the 21st Century Act has received some bipartisan support, Emmer’s anti-CBDC bill has met opposition from the Democrats. No Democrats voted for the amendment to block the CBDC in committee.
Republicans are using this united vote to secure broader support in their camp. Among the groups that expressed concerns over a CBDC were the House conservatives, who wanted to ensure that the interests of such entities were observed by introducing the anti-CBDC bill. Thus, this bill’s inclusion aims to win the votes of Republicans who may be reluctant to endorse the crypto regulation structure.
Potential Impact on Crypto Legislation
The result of this combined vote will be one of the determinants of what comes next as patterns of cryptocurrency regulation in the United States. Financial Services Committee Chair Patrick McHenry (R-N. C. ) is among the leaders who have been instrumental in molding the FIT for the 21st Century Act.
The bill also includes provisions for the regulation of stablecoin and protection for whistleblowers, however, the final text is still uncertain. If the united bills pass the House, they will undergo more scrutiny in the Senate, where bipartisan support will be vital.
Ongoing Debate and Considerations
The discussion of these bills reflects the general questions about the place of digital currency and the government’s control over it. According to a recent statement by Jerome Powell, the Fed will issue the central bank digital currency only if authorized by Congress, which stresses the role of legislative action in this sphere.
Concurrently, the bill has also been criticized by legislators such as Rep. Stephen Lynch (D-Mass.), the ranking Democrat on the House Financial Services crypto panel. Lynch has called the anti-CBDC bill shortsighted, arguing that the US shouldn’t ignore the rise of digital currencies in other countries.
Many other Democrats, including Lynch, worry that adding Emmer’s bill may drive away moderate Democrats who could have supported a wider cryptocurrency regulation.
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