Recent reports revealed that Democratic Party leaders have opted not to whip the coming vote on two pro-crypto bills. This seemingly positive development comes alongside the recent 180-degree turn the Biden administration appears to be taking on cryptocurrencies.
House Democrat Representatives Don’t Have To Vote No
According to an email shared by Politico, Democratic Party leaders did not urge its members to vote against two pro-crypto bills expected to be brought up to the House of Representatives floor soon.
The Whip Question revealed that Democratic leaders expect bills H. R. 4763 and H. R. 5403 to come to the floor this week. As a result, they have presented their issues with the bills despite not forcing the House Democrats to vote against them.
Bill H. R. 476, or Financial Innovation and Technology for the 21st Century (FIT21) Act, would provide a new regulatory framework for the industry. If passed, FIT21 would establish the Commodity Futures Trading Commission (CFTC) as the primary regulator of cryptocurrencies and clarify whether a digital asset is a security or a commodity.
Per the email, Democrat leaders consider that the bill includes language that “undermines decades of legal precedent and case law, thereby creating uncertainty in our traditional securities market.”
FIT21 would allegedly also provide a “safe harbor” for entities that would “shield them from SEC rules and regulations until SEC and CFTC finalize their rules,” effectively “weakening” investors’ protections against fraud and market manipulation.
Regarding the CBDC Anti-Surveillance State Act, or bill H.R. 5403, the Democratic Party considers that it would “have broad negative consequences.” The impact includes “hampering the primacy of the U.S. dollar,” and undermining “the Fed’s ability to conduct monetary policy.”
Due to this, Ranking Members Maxine Waters and David Scott strongly oppose the legislation, releasing a “Dear Colleague” letter on FIT21 specifically and urging Democrat House Representatives to vote “no.”
It’s worth noting that the American Bankers Association (ABA) urged House Representatives to back up bill H.R. 5403. On Monday, ABA published a letter supporting the bill.
The association believes a Central Bank Digital Currency (CBDC) is unnecessary and “would present unacceptable risks and costs to the financial system.” Additionally, ABA argues that it would fundamentally alter the relationship between citizens and the Federal Reserve, undermining “the important role banks play in financial intermediation.”
Politico journalist Eleanor Mueller revealed that the floor debate and passage of the bills are allegedly set for Wednesday, May 22.
Is The US Gov’t Shifting On Crypto Regulations?
The US government’s crackdown on cryptocurrencies has created an unclear and uncertain landscape for the crypto industry. Moreover, the strict and sometimes “overreaching” approach against the sector has been strongly criticized by important figures in the community and politicians.
Government scrutiny intensifies as the November elections approach. This has seemingly prompted Biden’s administration to pivot to a more strategic approach to crypto.
As reported by Bitcoinist, experts consider this change could be a response to Trump’s endorsement of cryptocurrencies. The Republican candidate and former president has received a positive response from the crypto community for supporting digital assets.
Moreover, the pressure from the community and key political figures, who have asked for clearer regulations and a more welcoming landscape, has put the US government “on the defensive,” as Riot Platform’s Director of Public Policy Sam Lyman highlighted.
Ultimately, the industry’s efforts should continue despite the recent victories. CoinRoutes Chair Dave Weisberger said, “It is NOT time to be complacent.”
