US Congress Commences: Fate of Crypto Hangs in the Balance

The 118th US Congress commenced on January 3, 2023.
Initial months are to be focused on FTX and stablecoin regulations.
Crypto taxes, agency jurisdictions etc., to follow.

There are two distinct views regarding cryptocurrency, and it’s either good or bad. As the United States Congress resumes, the current hottest topic will be for the lawmakers for and against the crypto industry.

More than 100 crypto industry advocates are struggling to keep the right balance between protection and innovation, according to the reports of the Blockchain Association.

On January 3, 2023, 118th United States Congress started in Washington D.C. and would continue until January 3, 2025, during President Joe Biden’s first term’s final two years.

The FTX saga, being connected with lobbyists and some lawmakers, and its sheer scale has put the crypto industry in the cross hairs. And this Congress would be very important for the industry as many regulations and bills are expected to be discussed.

Challenges Ahead

Director of Government Relations at the Blockchain Association, Ron Hammond, highlighted the opportunities and challenges for the Congress on the day it resumed by a Twitter thread on January 3, 2023.

1) This week in Congress and crypto: The first day of the 118th Congress has arrived! It is no secret, the crypto industry is in the crosshairs of Congress after the FTX fallout. This Congress presents challenges and opportunities though so here is the latest from the ground…
— Ron Hammond (@RonwHammond) January 3, 2023

Sam Bankman-Fried, became enemy number one on Capitol Hill, who was once a favorite political donor. Hammond added that many people in Washington are summing up FTX with the whole crypto industry.

FTX meltdown due to its massive scale could initiate “once-in-a-decade legislation,” To top this fear, there are many regulatory frameworks in working, such as the Lummis-Gillibrand bill. The bipartisan bill to address stablecoin regulation, agency jurisdictions, crypto taxes, banking & interagency coordination.

As per Hammond, the initial few months will be focused on FTX, and Stablecoin regulation will be a priority.

13) Smaller bills like stablecoins and spot market regulation have a chance of moving this year, but will likely need to wait til the dust settles on FTX both in the courts and the congressional hearings. Similar to the Robinhood hearings, more legislation will be proposed after.
— Ron Hammond (@RonwHammond) January 3, 2023

Smaller bills like the spot market and stable coin regulation will be moving slower, at least until the frame is clearer on FTX from congressional hearings and the court.

The Battle Within

The battle line is drawn between Patrick McHenry, pro-crypto Chair of House Financial Services and Sherrod Brown, anti-crypto Chair of Senate Banking. Brown took extreme measures last month, suggesting a crypto ban.

Agricultural Committees have also proposed regulations in crypto, as they advocate for the Commodity Futures Trading Commission (CFTC) to oversee the regulations.

Congress could also touch on some new topics, such as Non-fungible Tokens (NFTs), Decentralized Autonomous Organizations (DAOs), and Decentralized Finance (DeFi), as they are like hotcakes, or go to options because of enforcement actions last year, hinted Hammond.

Positives for the Industry

A positive side is that, according to Hammond, a strong team in Washington continues to gather talents from other industries for advocacy.

16) The good thing is crypto has a strong bench in DC and continues to poach talent from other industries on the advocacy, lobbying and policy front. The industry has done a great job realizing this is a crucial time in Congress and is putting in resources even amid crypto winter
— Ron Hammond (@RonwHammond) January 3, 2023

Formerly this group comprised less than a dozen people from the Blockchain Association, and few other groups are now 100+ strong policy experts. And this is a reasonably positive result that can be expected.

Ripple CEO Brad Garlinghouse feels optimistic about the new Congress and its supposed outcomes.

Today is the first day of the 118th Congress. While prior efforts at regulatory clarity for crypto in the US have stalled, I am cautiously optimistic that 2023 is the year we will (finally!) see a breakthrough. A thread on why…
— Brad Garlinghouse (@bgarlinghouse) January 3, 2023

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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Source: https://www.thecoinrepublic.com/2023/01/04/us-congress-commences-fate-of-crypto-hangs-in-the-balance/