A coalition of U.S.-based financial industry organizations has united to oppose a draft bill proposed by the U.S. House Committees on Financial Services and Agriculture concerning the structure of the cryptocurrency market.
The coalition, which comprises 21 organizations, including Americans for Financial Reform and the Center for Responsible Lending, co-signed a letter addressed to the US House committees on July 11, 2023.
In the letter, the coalition argued that the draft bill, titled “Digital Asset Market Structure Bill,” would give the cryptocurrency industry too much power and could lead to consumer harm.
They claimed that proponents of the cryptocurrency industry have actively advocated for the committee’s draft proposal even though the cryptocurrency industry has yet to demonstrate any practical application beyond speculative investing. They argued that the cryptocurrency industry is hiding under the guise of crypto innovation to advocate for favourable legislation.
The proposed bill aims to establish a clear regulatory framework for the cryptocurrency sector within the United States. It centers around the involvement of the United States Securities and Exchange Commission (SEC) in overseeing the regulatory framework.
One issue the coalition raised was a proposed amendment to the U.S. SEC’s regulatory rulemaking process, which would require the agency to evaluate new regulations based on the criterion of “innovation.” They claimed that doing that is dangerous because the provision “would likely be weaponized” and “weaken the agency’s authority over all securities investors and markets.“
The coalition posited that instead of rushing to embrace the cryptocurrency industry, policymakers should prioritize a cautious and informed approach that ensures that consumer protection and market stability remain at the forefront of any regulatory decisions. They also recommended that the U.S. Congress should back the U.S. SEC’s continuous enforcement efforts to ensure consumer protection.
In June 2023, the U.S. SEC took legal action against Binance and Coinbase, two prominent cryptocurrency exchanges known for their significant trading volumes. However, to the surprise of many, traders seemingly disregarded this news, as it had no noticeable impact on the overall value of the cryptocurrency market.
The fate of the draft bill is still uncertain. Representative Patrick McHenry, the committee’s chair, presided over a hearing on June 13, 2023 concerning the propositions of the bill. However, it is unclear whether the bill will have enough support to pass.
The outcome of the debate over the draft bill may significantly impact the future of the cryptocurrency industry. If the bill is passed, it could give the cryptocurrency industry a major boost. However, if the bill is defeated, it could set back the industry for years to come.
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