Bill to Counter Wall Street’s Influence on Crypto

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 toward building a coalition for tough regulation, Massachusetts Sen. Elizabeth Warren is circulating a letter among her colleagues calling on Acting Comptroller of the Currency Michael Hsu to be removed from office. the pro-crypto move 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 had served as chief legal officer at public crypto exchange Coinbase before being named interim controller.

In the letter she wants other senators to sign, Warren said Hsu’s earlier decision allowing the rulings to stand but telling banks to seek permission from the Office of the Comptroller of the Currency (OCC) was wrong. not 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 lighter approach and is favored by the crypto industry, while SEC Chairman Gary Gensler’s position is that virtually every cryptocurrency is a commodity.

The leaders of this campaign start with the senses. Cynthia Lummis of Wyoming and Kirsten Gillibrand of New York, whose Responsible Financial Innovation Act was the first fully formed regulatory framework proposal introduced. This would give the CFTC control over the crypto. The same would apply to the Digital Commodities 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 introduced The Securities Clarity Act, which would define fewer cryptocurrencies as securities than Gensler would prefer.

Rep. Patrick McHenry of North Carolina, meanwhile, has the Digital Token Clarity Act, which would also exclude certain tokens from security classification.

Longtime crypto-skeptic Rep. Maxine Waters of California, chair of the House Financial Services Committee, organized the Digital Assets Task Force for Democrats in June, which includes Rep. Brad Sherman of California, another vocal criticism of digital assets. Again, that also includes Rep. Ritchie Torres of New York, who told Politico in March that “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 introduced the ECASH Act, which would create a US central bank digital currency (CBDC). His co-sponsors include Reps. Jesús “Chuy” García of Illinois and Rashida Tlaib of Michigan.

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