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House Financial Services Committee schedules hearing on ‘Digital Dollar’ amid growing demand for cryptocurrency regulation.
The House Finance Committee has revealed plans for another hearing regarding cryptocurrency regulation as the call for congressional intervention in the dynamic industry grows stronger.
Organized by the Digital Assets, Financial Technology and Inclusion Subcommittee and titled “Digital Dollar Dilemma: The Implications of a Central Bank Digital Currency and Private Sector Alternatives,” the hearing is scheduled for 2:00 PM ET on Thursday, September 14, 2023.
The year 2023 has seen a surge of activity from federal agencies and legislators striving to address the swiftly changing environment of digital assets. The need for a unified legislative framework has arguably reached a critical juncture, driven by market fluctuations, concerns over investor protection, and the international competition to establish standards for digital currencies.
Congressional pressure
The cryptocurrency sector has garnered heightened attention from Capitol Hill this year, with lawmakers from both parties feeling the urgency to take action.
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At the forefront, Democratic Senator Elizabeth Warren reintroduced the Digital Asset Anti-Money Laundering Act in late July, receiving unexpected support from Wall Street banks. This legislation aims to mitigate national security threats associated with cryptocurrencies by holding crypto enterprises to the same standards and obligations as traditional financial institutions. In a press statement, Warren expressed worries about cryptocurrencies becoming the favored payment method for cybercriminals, describing her bill as the “most stringent proposal on the table to combat crypto crime.”
The bill, which was first introduced in December 2022, is comprehensive. It requires entities such as crypto wallet providers, miners, and validators to comply with the Bank Secrecy Act, advocating for know-your-customer protocols. The proposed legislation also assigns the Treasury Department, SEC, and CFTC with the responsibility of creating review processes for crypto businesses, and it instructs FinCEN to address regulatory gaps, particularly those related to self-custody wallets.
Warren is not the sole advocate in Congress seeking regulatory clarity. Merely two days prior to Warren’s announcement, the House Financial Services Committee moved forward with a collection of seven crypto-related bills. This initiative, led by Republicans, included legislative contributions from Chairman Patrick McHenry, Rep. Warren Davidson, and Rep. Bill Huizenga, and it covers various aspects of digital asset regulation, ranging from stablecoins to SEC disclosures.
Nonetheless, the extensive package has faced criticism. Democratic Representative Maxine Waters pointedly remarked that the bill seemed to prioritize the interests of the crypto industry over those of the general public or the perspectives of other regulatory agencies.
In June, Waters also requested input from the SEC and the Treasury Department regarding the Digital Asset Market Structure Discussion Draft, a Republican-led legislative initiative. This bill, primarily focused on defining a cryptocurrency as either a commodity or a security, also aimed to clearly outline regulatory responsibilities.
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