Democrats and The republicans in Congress have drastically opposing opinions on cryptocurrencies. Democrats argued for wide “guardrails” to safeguard customers and clients at a Congressional committee on Wednesday, claiming that the marketplaces have grown riddled with deception, frauds, and “stablecoin” tokens that might possibly disrupt the wider financial sector.
Joint Economic Committee Chairman Rep. Don Beyer (D-VA) mentioned that retail investors might be deceived in the recent Squid Game token meltdown, which Binance, the largest global cryptocurrency exchange, is looking into. The token has no formal connection to the popular Netflix series. According to CoinMarketCap, bitcoin fell more than 2% on Thursday, reaching as low as $58,283. Bitcoin is already well off its November 10 peaks of over $69,000.
Ether was also down, down 0.4 percent to $4,134. Other cryptocurrencies fared worse, with Solana down 4 percent, Dogecoin down 5.4 percent, and Shiba Inu down 10.9 percent. Beyer asked Congress to support the Digital Asset Market Framework and Investor Protection Act, which he introduced last summer. The 58-page bill includes measures to classify some cryptocurrencies as securities, exposing them to control by the Securities and Exchange Commission, and it would define a wide concept of digital assets as commodities, exposing them to oversight by the Commodity Futures Trading Commission. Beyer also seeks the Treasury Department to create laws for stablecoins, which are tokens aimed at keeping $1 value, claiming they present systemic financial dangers. According to him, stablecoins ought to be subject to capital reserve and liquidity criteria comparable to those imposed on bank deposits and money-market funds. In addition, if stablecoins presently on the market do not gain federal permission, he would prefer to outlaw them. According to an evaluation by the legal firm Latham & Watkins, Beyer’s plan “would not grandfather existing stablecoins,” necessitating issuers to seek government authorization.
Sen. Mike Lee (R-Utah) persuaded Congress to let the technology develop, saying Congress should fight “one-size-fits-all regulation,” which he described as “kind of scary, especially when it’s targeted at cryptocurrency.”
Lee suggested that strict laws would drive businesses researching blockchain technology overseas, and he suggested that Congress enforce existing rules with a “light touch.” Sen. Ted Cruz (R-Texas), a big supporter of crypto tech and Bitcoin mining, which is quickly growing in Texas, issued even tougher concerns.
Cruz expressed concern that the infrastructure investment package has an extremely wide definition of cryptocurrency “brokers,” putting impractical reporting obligations on some transaction intermediaries. He pointed out that it is a crime under the law not to record commercial cryptocurrency transactions exceeding $10,000, which is equivalent to the rules for financial transactions.
Cruz presented legislation this week to abolish the infrastructure bill’s tax-reporting restrictions. It is unlikely to pass in the Democratic-controlled Senate. Furthermore, the new restrictions will not go into force until 2024, giving crypto lobbyists and their congressional supporters time to file legal hurdles.