Tensions are rising as U.S. lawmakers work to add cryptocurrency provisions to year-end legislation.

adminDecember 2, 2023

U.S. lawmakers are still racing to include cryptocurrency-related measures in their year-end legislative packages, but industry sources say more action is expected in 2024.

while Republican House Speaker Mike Johnson’s approach to the spending bill could mean there won’t be a larger “omnibus” bill at year-end that could take several measures, and some cryptocurrency provisions could still end up in other year-end bills. there is. .

The National Defense Authorization Act requires regulators to set standards for scrutiny of financial institutions engaging in cryptocurrency activity, while also requiring the Treasury Department to make recommendations to Congress on cryptocurrency mixers.

The amendments are still in flux, Senator Lummis told reporters at the Blockchain Association Policy Summit on Thursday.

“I’ve heard rumors that they may be embroiled in another negotiation, but I don’t know if that will survive,” Lummis said. “But we should know more early next week.”

‘Good compromise’

The proposed amendments are acceptable to the cryptocurrency industry, said Cody Carbone, vice president of policy at the Digital Chamber of Commerce. The cryptocurrency industry is less interested. Bill By expanding know-your-customer requirements to miners and wallet providers, Senator Warren aims, in part, to crack down on the use of cryptocurrencies for money laundering and sanctions evasion.

“We don’t want to create new standards and burdens on some players in the ecosystem who aren’t involved, which is what Warren’s bill will do to miners and validators who don’t work with their customers,” Carbone said. “So we think this is a good compromise.”

One of the bills Carbone said he would like to add to the NDAA is the Financial Technology Protection Act. group We work with representatives from several federal agencies, including the Treasury Department, to combat terrorism and illicit financing.

“We are hopeful and have been advocating for it to be added,” Carbone said.

The cryptocurrency provision was introduced in Rep. Josh Gottheimer’s DN.J. It could also be included in the final spending package, like lawmakers. The package allocates $3 million to the Treasury Department for research and collaboration with blockchain analytics companies to combat terrorist financing. Carbon said. Other, more partisan bills, such as Republican Rep. Tom Emmer’s provision to remove all funds from the Securities and Exchange Commission for cryptocurrency-related enforcement actions, are unlikely to be included, Carbon said.

Tensions rise.

According to multiple news reports, Rep. Patrick McHenry, chairman of the House Financial Services Committee, has been pushing for cryptocurrency legislation to be included in the NDAA. His committee introduced a market structures bill and another bill to regulate stablecoins at the federal level over the summer, awaiting a full House vote.

Ron Hammond said, “The rumors are true. They are trying to push market structures or stablecoins, but the odds of that happening successfully are very low, but we’ll see.” He is the Director of Government Relations at the Blockchain Association.

McHenry would still need the consent of Sen. Sherrod Brown of Ohio. Brown leads the Senate Banking Committee and has been critical of the cryptocurrency industry, most recently crackdown.

Hammond said stablecoin legislation, which has received a bit more support from top Democrats such as former House Financial Services Committee Chairwoman Maxine Waters (D-Calif.), could potentially be included in the NDAA. It’s unlikely that either bill will be included in the NDAA, but given concerns about Tether being used for illicit finance, the stablecoin provision is the more likely of the two, Hammond said.

McHenry also threaten According to Punchbowl News, they are determined to block the NDAA’s bipartisan banking policies, including legislation introduced by Brown last week to address the fentanyl crisis. The Chamber of Digital Commerce’s Carbon said market structure and stablecoin notes are essentially McHenry’s baby, but said the industry is likely to see a “more dedicated legislative effort in 2024.”

“This bill is definitely a priority for him and based on what we’re seeing, I think it’s a higher priority than we expected,” Carbone said. “These are his babies and he is really dedicated to moving them, so I think it makes sense for him to find every possible vehicle that can get them through.”

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adminDecember 2, 2023