2024 U.S. defense bill drops crypto rules from legislation

Lawmakers have removed crypto provisions from the 2024 National Defense Authorization Act as it heads to a final vote.

The 2024 National Defense Authorization Act heads to near-certain approval without new rules on cryptocurrencies after negotiators stripped the crypto language to ease passage in both chambers.

Despite the legislation retaining broad provisions on existing security programs, it steers clear from extending regulatory oversight to digital assets. This decision defers any potential new cryptocurrency regulations to possible future congressional action.

According to the Senate Armed Services Committee, the bill omits a Senate amendment that would have required the Treasury Secretary to establish a review process assessing financial institutions’ cryptocurrency money laundering controls and compliance.

Another dropped Senate proposal would have compelled the Treasury Secretary to submit a report and briefing to congressional committees, evaluating technologies enabling anonymous crypto transactions and legislative and regulatory approaches in other countries.

With the cryptocurrency regulations being set aside, the hurdles to passage across both congressional chambers have been lowered. However, the broad military policies remain unchanged, albeit without an increase in digital asset oversight.

Markups Focused on Core Defense Priorities

The National Defense Authorization Act (NDAA) is legislation passed by Congress each year to authorize funding and set policies for the U.S. military and defense programs. As one of the few major bills that routinely becomes law annually, the NDAA establishes spending levels and management priorities across all branches of the armed forces and Department of Defense agencies.

As the bill is usually considered a must-pass legislation, lawmakers frequently attempt to add other provisions to its language. These often face strict scrutiny before the final vote.

Instead, negotiators focused narrowly on core military priorities. These encompass troop pay raises, weapons upgrades, domestic surveillance extensions, semiconductor projects, Navy shipbuilding plans, and similar defense policy provisions.

Military officials now look to lock down $886 billion on priorities like these — while sidestepping asset transparency rules proposed but ultimately tabled during lengthy consensus-building talks. It also continues wide-set existing military policies absent recently proposed expansions assigning more regulatory duties over cryptocurrencies.

With the cryptocurrency-related provisions removed, the NDAA now progresses toward a final vote and the president’s signature.