The United States is one of the fastest growing regions in the cryptocurrency industry in the world. The results of the 2022 midterm elections last November could determine the next priorities for banking and cryptocurrency regulation, which will have a significant impact on the sector.
According to the election results, the Democrats control the Senate with a slight advantage and the Republicans control the House of Representatives. Therefore, the new Speaker of the House of Representatives and the House Finance Committee will be key players in the future settlement. Currently, California Republican Party Leader Kevin McCarthy has been nominated for the position, but he still faces opposition within the party and has not been approached for the job.
Opinions differ
Cryptopolitics is a relatively new topic, and after Congress' bitter battle with Big Tech over privacy, there is an urgent need to crack down on digital asset regulation before it spins out of control. According to the Harris Poll, 38% of U.S. midterm voters consider candidates' positions on cryptocurrency when filling out their ballots.
Major crypto companies have been spending big on the election, making big donations to opponents like recently elected Republican Senator Cathy Brett, who took over from Senator Richard Shelby in Alabama. Governor Greg Abbott, who beat Beth O'Rourke in the Texas gubernatorial race, is an advocate for the blockchain and digital asset industry. Democratic congressional candidate Jonathan Jackson, a supporter of the digital asset industry, won a landslide victory in his district of Chicago.
Historically, the Republican Party has been in favor of digital currency expansion, and that's often a bipartisan issue. However, many Republicans have opposed further research into the potential of central bank digital currencies (CBDCs) in the United States. Rep. Tom Emmer, R-Minnesota, introduced a bill in January 2022 that would limit competition for other digital assets, such as stablecoins, to prevent the development of a federal currency. This indicates that additional pressure will be exerted on GOP-appointed regulators, particularly the Biden administration.
Although there are pro-crypto members of Congress on both sides of the aisle, many Democrats have expressed a lack of faith in digital assets. Senator Elizabeth Warren has criticized Bitcoin for its energy consumption and the negative impact of digital currency mining on the environment. In early 2022, Democrat Anna Kells proposed legislation in New York that would ban new carbon-fueled cryptocurrency mining facilities for two years, forcing companies out of the region despite not being no law yet. Others support mining facilities which they believe will create more jobs.
After the shock caused by the FTX scam to the crypto industry, in the medium term, digital currency policy will focus on combating fraud and theft. The scandal has sparked interest in the new law, with cryptocurrency advocates like Rep. Patrick McHenry (RN.C.) and Sen. Cynthia Lamis (R-Waumea) calling for tougher regulation.
Republican Congressman Warren Davidson, author of the Code Classification Act, which clarifies crypto regulations, is re-elected to Congress.
The law will soon be passed
Bipartisan legislation introduced this year would give the CFTC more power to regulate major digital currencies. The new rules are designed to end regulatory uncertainty and contention between the two largest regulators, the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), as the SEC tightens its grip on digital assets. .
There are three main cryptocurrency regulatory bills before Congress: the Digital Assets Exchanges Act of 2022, the Responsible Financial Innovation Act, and the Digital Assets Consumer Protection Act, which would establish the CFTC as the primary regulator of digital currencies. digital assets.
The most comprehensive legislation being drafted in Congress is the bipartisan Lummis-Gillibrand bill designed to develop a regulatory framework for blockchain and digital assets, with a focus on the integration and growth of digital currencies. in the United States for competitive and cause-specific reasons. creativity.
Other notable digital asset regulation bills include the Digital Consumer Protection Act, designed to increase transparency and accountability for digital asset companies, and the Cryptocurrency Stable Bill. of Congressman McHenry and Rep. Maxine Waters (D-Calif.).
What else?
Looking to the future, it looks like cryptocurrencies will continue to be a binary issue. Ahead of the 2023 legislation, there may be additional momentum to drive the growth of cryptocurrencies through popular legislation such as the Lummis-Gillibrand Act to protect consumers and provide transparency in the crypto industry. Overall, with the FTX scandal and subsequent cryptocurrency crash, major bipartisan legislation is being crafted in Congress to develop and regulate digital assets.