Congressional Stablecoin Bill Stirs Controversy Among Democrats27. July 2023
• Congressional is trying to pass a bill that will give the CFTC more jurisdiction over crypto.
• The bill, titled the Financial Innovation and Technology for the 21st Century Act, focuses on “decentralization” and “functionality” of digital assets.
• Democrats have criticized the bill, claiming it is overly friendly to the crypto industry similar to what disgraced FTX boss Sam Bankman-Fried had advocated for.
Congressional Stablecoin Bill
The U.S. Congress is currently undertaking its first-ever markup for digital asset legislation with an aim to establish clear jurisdiction for the nation’s chief market regulators. The bill, titled the Financial Innovation and Technology for the 21st Century Act, focuses on “decentralization” and “functionality” of digital assets in order to clarify how the Supreme Court’s Howey Test applies to them without having them classified as securities themselves.
House Financial Services Committee (HFSC) Chair Patrick McHenry (R-NC) has shown his support towards this bill as it would provide clarity in terms of investor protection laws being reworked to accommodate cryptocurrencies.
Democrats Criticize Bill
However, most Democrats are not too keen on this idea as they find it too friendly towards the cryptocurrency industry. Rep Maxine Waters (D-CA) has called it a “wish list” for crypto companies and disregards views from both President Biden’s administration and Securities and Exchange Commission (SEC). She also argued that new regulatory structures shouldn’t be invented simply because these companies refuse to follow existing rules.
Sam Bankman-Fried Involvement
Many Democrats believe the bill echoes what disgraced FTX boss Sam Bankman-Fried had proposed which further adds fuel to their criticism against this act.
Overall, there appears to be a divide between Republicans and Democrats when it comes to giving CFTC more jurisdiction over cryptocurrencies as well as implementing laws that accommodate crypto businesses with respect to investor protection laws.