Bill to Counter Wall Street’s Influence on Crypto

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The cryptocurrency regulatory proposals that have been circulating on Capitol Hill so far have been largely industry-friendly, but opposition to this approach is beginning to organize.

In what is almost certainly a first step towards building a coalition for tough regulation, Senator Elizabeth Warren of Massachusetts is circulating a letter among her colleagues calling on the Acting Comptroller of the Currency Michael Hsu to revoke the pro-crypto ruling that would allow banks to get more involved in digital assets.

Read also: Sen Warren calls DeFi the ‘most dangerous’ part of crypto during Senate hearing

The three interpretative letters, issued by then Comptroller Brian Brooks between July 2020 and January 2021, allow banks to hold crypto for customers, hold stablecoin accounts, and use stablecoins to make payments and settle transactions. Brooks was a public crypto exchange CoinbaseGeneral Counsel of before being appointed interim controller.

In the letter she wants other senators to sign, Warren said Hsu’s earlier decision allowing the rulings to stand but telling the banks to seek permission from the Office of the Comptroller of the Currency (OCC) does not didn’t go far enough, Bloomberg reported.

See also: SoFi Bank Charter Decision Signals Crypto is Still Off Limits for Banks

Citing the recent $48 billion collapse of a stablecoin and subsequent bankruptcies of crypto lenders, the letter says the moves have exposed banks to unnecessary risk — even though Hsu’s stance has been widely interpreted as asking to first so we can tell you no – as they don’t “properly address the shortcomings of previous interpretation letters and the risks associated with crypto banking, which have worsened in recent months.”

Read also: How Stablecoin’s $48 Billion Collapse Affected Crypto

However, battle lines are forming and the pro-crypto group is better organized, with the Congressional Crypto Caucus led by Tom Emmer of Minnesota and Bill Foster of Illinois.

Here’s a look at some of the key players in the coming fight over crypto regulation, which will begin in earnest in October, when federal agencies are expected to outline a plan for a general crypto regulatory framework to comply with the Executive Order of March of President Joe Biden. .

See more : Biden Executive Order Set To Accelerate Crypto Policy

It is important to note that this is not a pro-crypto/anti-crypto list, but rather a look at members of lawmakers who have been active in the field. Virtually every member of Congress who has publicly discussed the issue has said they want to strike a balance between protecting innovation and protecting the public.

Light or heavy hand?

One of the main differentiators is whether cryptocurrencies should be treated as securities under the authority of the Securities and Exchange Commission (SEC) or as commodities under the supervision of the Commodity Futures Trading Commission (CFTC). ). The latter is supposed to offer a more lean approach and is favored by the crypto industry, while the SEC Chairman Gary GenslerThe position of is that virtually every cryptocurrency is a commodity.

The leaders of this campaign start with Sens. Cynthia Lummis from Wyoming and Kirsten Gillibrand from New York, including Responsible Financial Innovation Act was the first fully formed regulatory framework proposal introduced. This would give the CFTC control over the crypto. So would be the Digital Products Consumer Protection Act proposed by Sens. Debbie Stabenow of Michigan and John Boozman of Arkansas, who chair the Senate Agriculture Committee that oversees the CFTC.

Read more: Crypto Fight on Capitol Hill increasingly favors the CFTC

In the House, Emmer and Representatives Darren Soto of Florida and Ro Khanna of California presented The Securities Clarity Actwhich would define fewer cryptocurrencies as securities than Gensler would prefer.

Rep. Patrick McHenry of North Carolina, meanwhile, has the Clarity of digital token lawwhich would also exclude certain tokens from ranking as securities.

Longtime crypto-skeptical Rep. Maxine Waters of California, chair of the House Financial Services Committee, hosted the June Digital Assets Working Group for Democrats, which includes Rep. Brad Sherman of California, another vocal critic of digital assets. Again, it also includes Rep. Ritchie Torres from New York, who Told Politico in March that “the radical decentralization of the internet and finance strikes me as a deeply progressive cause. You should never define a technology by its worst uses.

Representative Stephen Lynch of Massachusetts chairs the FinTech Task Force and presented the ECASH law, which would create a US central bank (CBDC) digital currency. His co-sponsors include Reps. Jesús “Chuy” García of Illinois and Rashida Tlaib of Michigan.

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