Regulation
Democrats Vote for Pro-Cryptocurrency Legislation FIT21
It started slowly with some stubborn Democrats in Congress who refused to toe the partisan line established by party leaders. That trickle of resistance became a trickle and then a river over the past month as many of their colleagues, including powerful Senate Majority Leader Chuck Schumer (D-N.Y.), joined them in voting for a legislative act on cryptocurrencies. Finally the dam broken on Wednesday, when 71 Democrats joined 208 Republicans in the House of Representatives to pass another one pro-cryptocurrency law– this time clarifying the regulatory authority of the SEC and CFTC – and sweeping away the ideological hard line imposed by the progressive wing of the party.
Crypto Twitter, never subtle at the best of times, treated this week’s bipartisan show of support for cryptocurrencies as a glorious national achievement on par with civil rights legislation or the founding of the republic. The cheerful rhetoric was excessive but understandable. Earlier this year, hope for crypto reform in Washington, D.C., was all but dead, and it looked like the industry’s nemesis, SEC Chairman Gary Gensler, would have the last laugh. But thanks to a shrewd national public relations campaign led in part by former Schumer aide Josh Vlasto, many Democrats have come to realize an obvious truth — that a sizable portion of people under 50 care about cryptocurrencies – and the ground began to change.
The straw that broke the camel’s back for senior Democrats may have been the sight of former Bitcoin foe President Donald Trump embracing the sector and positioning himself to vacuum up tens or potentially hundreds of millions of crypto-dollars . There is speculation that someone in the White House has finally concluded that campaign contributions and electoral politics have trumped progressive pearl-gathering when it comes to cryptocurrencies.
The question is: what happens now? Even though the cryptocurrency industry scored a huge symbolic victory this week, the bills passed have yet to reach the finish line. The first, which would make it viable for banks to hold cryptocurrencies, was approved by both houses of Congress, but still faces a veto threat from President Joe Biden (though that seems less likely every day). The other, regarding the SEC and the CFTC regulator, has yet to make it out of the Senate, where it could be bottled up by staunch cryptocurrency opponent Sen. Sherrod Brown (R-Ohio).
Even if the bills become law, they would be incremental measures and won’t help the cryptocurrency industry in court, where Gensler has his foot on the throats of leading companies, including Coinbase. Meanwhile, the SEC chairman can continue to wreak havoc on the regulatory front by labeling everything he sees as a security under his jurisdiction. And while the industry appeared to take a breather when another anti-cryptocurrency regulator, FDIC Chairman Martin Gruenberg, said he would step down following a sexual harassment scandal, there is every sign he will take his time to do it.
The bottom line is that the cryptocurrency industry had its best week ever in Washington, DC, but still has an uphill battle to carve out a secure place in the US economy. As Churchill once said: “It is not even the beginning of the end. But maybe it’s the end of the beginning.”
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
DECENTRALIZED NEWS
A Fed survey they found that the number of US adults who had used cryptocurrencies fell to 7%, although the survey period overlapped with a market downturn. (WSJ)
Altcoins with links, or alleged links, to artificial intelligence have gone after the chipmaker Nvidia published the results of the outbreak. (CoinDesk)
The lead developer of Solana’s second cellphone, which will cost $500, the unlikely device is said to already have more than 130,000 pre-orders. (DL News)
The imminent Ethereum ETF they will likely fail because would-be issuers, pressured by the SEC, say they will not offer staking rewards. (Bloomberg)
To celebrate cryptocurrency day Bitcoin Pizza Day, Coinbase set up a truck selling slices for 1 USDC. (New York FREE)
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