House Democrats Take a Stand: 2 Pro-Crypto Bills Head to Vote

A leaked email from House Democratic leaders, including House Financial Services Committee Ranking Member Maxine Waters and House Agriculture Committee Ranking Member David Scott, indicates their strong opposition to two Republican-led crypto bills. While they will not mandate House members to vote against the bills, they strongly encourage them to do so.

FIT21 Bill Sparks Opposition from Waters and Scott: Concerns Over Legal Precedents and Market Uncertainty

One of the bills in question is H.R. 4763, the Financial Innovation and Technology for the 21st Century Act (FIT21), which seeks to benefit the crypto industry. However, Waters and Scott oppose it, arguing that it disrupts established legal precedents and introduces uncertainty into the traditional securities market.

The office of the Democratic Whip emphasized the bill's undermining of legal precedent and case law, creating uncertainty in the securities market. The bill provides a safe harbor for entities to file an "intent to register," protecting them from securities law rules and regulations, which the Democrats find problematic.

"Dear Colleague" Letter

A "Dear Colleague" letter published on the Democrats' page of the House Financial Services Committee further elaborates on the leaders' opposition to the bill, labeling it the "Not Fit for Purpose Act." It would transfer regulatory oversight of the crypto sector to the Commodity Futures Trading Commission and has received support from the US crypto industry, despite opposition from Democrats.

Democrats Oppose Emmer's Bill: Concerns Over Potential Impacts on Federal Reserve's Monetary Policy

Additionally, the email from the Democratic Whip's office urged lawmakers to vote against another bill introduced by Majority Whip Tom Emmer, which aims to prevent the Federal Reserve from issuing a central bank digital currency (CBDC). Democrats raise concerns about the bill's broad definition of CBDCs potentially undermining the Fed's ability to conduct monetary policy.

According to the Congressional Budget Office (CBO), the bill’s overly broad definition of CBDC raises concerns the bill could undermine the Fed’s ability to conduct monetary policy […] Particularly concerning as it attempts to navigate a soft landing in regard to inflation.


Democrats Email

FIT21 Advocates Tout Regulatory Framework Advancement, Backed by Key Industry Players

Supporters of FIT21, including Coinbase, Kraken, and Andreessen Horowitz, argue that it establishes a regulatory framework that the US currently lacks. The bill expands the authority of the Commodity Futures Trading Commission to regulate digital commodities and defines whether a digital asset is a security or a commodity.

The leaked email and subsequent Democratic opposition shed light on the complex legislative landscape surrounding crypto regulation in the US. While pro-crypto bills aim to provide regulatory clarity and support for the industry, concerns about legal precedent, market uncertainty, and the potential impact on monetary policy underscore the challenges faced by policymakers.