U.S. Financial Services Committee Advances Landmark Crypto Regulatory Bill

The U.S. House Financial Services Committee has made a landmark achievement by moving forward with a bipartisan bill focused on establishing a regulatory framework for Bitcoin and cryptocurrencies.

The approved bill aims to categorise cryptocurrencies as securities or commodities and proposes an expansion of the Commodity Futures Trading Commission's (CFTC) oversight over the crypto market.

It also seeks to address concerns about the Securities and Exchange Commission's (SEC) jurisdiction and its perceived overreach, which has sparked debates among crypto advocates.

Representative Patrick McHenry, the Republican chair of the House Financial Services Committee, is a key proponent of the bill and aims to position the United States at the forefront of digital asset regulation, citing other countries that have already established clear regulatory frameworks for digital assets.

This is the first time a crypto regulatory bill has gone through the markup process in Congress, representing a major success for the industry, which has tirelessly advocated for regulatory certainty.

Notably, the bill has received substantial support from the crypto industry and stands a good chance of gaining traction in the Senate, despite facing opposition from some Democrats.

The bill's success has prompted celebrations within the industry, with Jerry Brito, executive director of Coincenter, praising its passage as a win for individual rights in writing and using cryptocurrency software.

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Coinbase CEO Brian Armstrong also encouraged support for the bill, emphasising its role in securing regulatory clarity and protecting American innovation and national security, citing:

The bill will evolve during the legislative process, but a vote today for the Financial Innovation and Technology for the 21 Century Act is a vote to protect your crypto, American innovation, and national security.

However, the road ahead may not be entirely smooth. Representative Maxine Waters, the top Democrat on the Financial Services Committee, staunchly opposes the legislation, arguing that it could create more confusion and provide fewer protections for consumers and investors compared to the existing regulatory landscape.

The bill's progress through the Democratic-led Senate may encounter challenges, with the crypto-critic and head of the Senate Banking Committee, Sherrod Brown, expressing uncertainty about the need for additional regulation.

Alongside the landmark crypto bill, lawmakers are set to consider another bill that aims to establish requirements for issuing stablecoins while maintaining state regulators' authority.

This bill has similarly undergone significant modifications to address Democratic concerns about potential evasion of stricter oversight by stablecoin issuers.