Congress is pushing for cryptocurrency legislation, putting it back in the spotlight.

Big Week ​for Cryptocurrency Legislation on Capitol Hill

It was an eventful week for cryptocurrency on Capitol Hill, with the House making significant progress⁣ on ​key legislation and a group of bipartisan senators ‌planning an even more aggressive bill. Lawmakers are aiming to establish stronger regulations for the cryptocurrency industry, particularly in light of the FTX collapse last‌ year. The​ proposed bills seek ‍to overhaul crypto regulation, create a regulatory framework for stablecoins, and crack down ‍on the use of digital assets for ​money laundering.

House Financial Services Committee Approves Regulatory Framework

On Wednesday,‌ the House Financial Services Committee approved​ legislation that⁤ would establish a regulatory‌ framework for the issuance and ​trading of digital ‌assets at the Securities and Exchange Commission (SEC) and Commodity Futures⁢ Trading Commission (CFTC). The bill ‌received a 35-15 vote, with six Democrats joining Republicans in support. The ‌legislation requires cryptocurrency companies to ​register with either the SEC or CFTC and‍ introduces a certification system for issuers to demonstrate sufficient decentralization. This classification as commodities would place tokens under the oversight of the CFTC. The bill also mandates joint rulemaking by the SEC and CFTC and calls ‍for ⁣studies on nonfungible tokens and ​decentralized finance.

The legislation aligns with ‍a recent⁢ federal judge’s ruling that⁢ cryptocurrency Ripple’s token ⁤is not necessarily⁤ a security. The inclusion of this language in the bill reflects the ruling’s impact.

Despite some opposition, the bill⁤ was seen as an improvement over the current situation by ⁢lawmakers like Rep. Jim Himes, who voted ⁢in favor of it. However, caution was‌ advised by John Berlau, a⁢ senior fellow at the Competitive Enterprise Institute, who⁣ emphasized the need to avoid granting excessive power to federal agencies.

Focus on​ Stablecoin Market

Another significant ⁢piece​ of legislation​ passed out of the Financial ⁣Services Committee on Thursday, targeting the stablecoin market. Stablecoins are a type of cryptocurrency that maintains its value by being backed by an underlying asset, such as gold or fiat currency. The Clarity for Payment ⁣Stablecoins Act, ​which passed with a 34-16 vote, establishes a federal regulatory structure while allowing individual states to play a role. The bill ⁣defines the assets that can ⁤back stablecoins, requires stablecoin issuers to submit certificates to regulators, sets parameters for banks issuing stablecoins, and establishes capital ⁤requirements for issuers.

The markup ⁢session for this legislation began with Chairman Patrick McHenry accusing the White House of hindering bipartisan efforts to reach a deal. Despite this,​ progress was made in defining ​regulations for stablecoins.

Bipartisan Effort ‌to Combat Money Laundering

On Friday, a ⁢bipartisan group of senators, led by Elizabeth Warren and⁣ Roger Marshall, reintroduced the Digital Asset Anti-Money Laundering⁢ Act. This⁣ legislation‍ aims to crack down ⁤on money ⁢laundering and terrorism financing through cryptocurrencies. The bill would enforce know-your-customer rules on participants in the cryptocurrency space, such as wallet providers and crypto miners. It would also require institutions ‌to verify customer identities and keep records ⁤of⁣ transactions⁣ involving “unhosted” wallets.

Warren emphasized the need to address the ​use of cryptocurrencies by rogue nations, ​drug lords, and ‌fraudsters for illicit activities. The bill ⁢aims to provide regulators with the necessary tools to⁤ combat crypto crime.

Bitcoin Price and Industry Outlook

Amid the regulatory push, the price of bitcoin, ⁢a key indicator of the overall cryptocurrency market, experienced‌ some decline. However, overall, bitcoin and other crypto tokens have​ seen an increase in value ​since the beginning of the ​year. As of Friday afternoon, bitcoin was trading above $29,000, marking a 16%‌ increase from a recent dip‌ in June and a significant 76% increase since the start of the ⁤year.

Despite the challenges faced by the industry, the recent legislative developments provide hope for a more regulated and ⁢secure cryptocurrency landscape.

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