The Uphill Struggle faces the US Crypto Industry as it arrives in Washington for analysis
Crypto Companies Push for Industry-Friendly Laws on Capitol Hill
Crypto companies are heading to Capitol Hill to advocate for laws that support the cryptocurrency industry. However, their efforts may be overshadowed by discussions about the federal budget and a Senate crackdown on the use of crypto for money laundering.
Executives from various digital asset companies, including Coinbase and Stand With Crypto, are meeting with lawmakers and their staff as part of a grassroots advocacy campaign. The goal is to convince lawmakers to advance two bills passed by the House Financial Services Committee that provide clarity on financial rules for the industry.
Despite their efforts, the crypto industry may struggle to be heard due to lawmakers’ focus on other pressing matters, such as avoiding a government shutdown and passing bills like the Farm Bill and National Defense Authorization Act. The industry faces tough competition for attention.
Industry Expansion in Washington
Crypto companies have been expanding their presence in Washington to address increasing regulatory scrutiny, particularly from the Securities and Exchange Commission (SEC). The SEC has accused Coinbase and Binance of failing to register tokens, leading to heightened lobbying efforts from the industry.
Record Lobbying Spending
The crypto industry has spent nearly $13 million on federal lobbying in the first half of 2023, putting it on track for another record-breaking year. Coinbase has been the leading spender, investing $1.4 million in lobbying efforts.
The crypto delegation includes Coinbase CEO Brian Armstrong, who is meeting with lawmakers from both parties. OpenSea, the top non-fungible token marketplace, is also represented. These figures aim to ensure that government actions do not undermine the progress made by the crypto industry.
Crypto companies hope for a collaborative approach to regulation that fosters innovation and protects users. They are encouraged by policymakers’ interest in non-fungible tokens (NFTs) and believe that working together can lead to effective regulation.
Coinbase has launched a media campaign to raise awareness and encourage crypto users to urge their members of Congress to pass crypto legislation. The outcome of these efforts remains uncertain.
The July bills passed by the House Financial Services Committee aim to define when a cryptocurrency is considered a security or a commodity, limiting the SEC’s authority. Another bill focuses on creating federal rules for stablecoins, which are tokens pegged to traditional assets.
The bills will either be considered by the full House or introduced in the Senate. While a House vote before the end of the year is possible, the outlook is less favorable in the Senate, where industry-friendly crypto bills have struggled to gain traction.
Focus on Money Laundering
Both Democrats and Republicans are prioritizing efforts to curb the use of crypto in money laundering and terrorist financing. The Senate has already passed its version of the National Defense Authorization Act, which includes increased scrutiny of anonymous crypto transactions.
Sherrod Brown’s Stance
Senate Banking Committee Chair Sherrod Brown has shown little interest in advancing the House bills, emphasizing the need for a framework of rules that protect the economy and consumers. Without his support, the chances of industry-backed crypto legislation in the near-term are slim.
Crypto companies are advocating for industry-friendly laws on Capitol Hill, but their efforts face challenges due to competing priorities and regulatory concerns. The outcome remains uncertain, and the industry must continue to push for its interests while navigating the complex legislative landscape.