As the year comes to a close, U.S. lawmakers are actively seeking to incorporate cryptocurrency-related measures into the final legislative packages of 2023. While some industry insiders suggest that more substantial action may occur in 2024, there are ongoing efforts to integrate crypto provisions into year-end bills. Notably, the National Defense Authorization Act is a focal point for potential amendments related to the crypto industry.
Inclusion of crypto measures in year-end bills
Republican House Speaker Mike Johnson’s approach to a spending measure has raised questions about the possibility of a larger “omnibus” bill that would allow for multiple measures to be added at year-end. However, despite this uncertainty, it remains possible that specific crypto provisions could find their way into other legislative packages.
One significant amendment currently under discussion involves a bipartisan effort by Senators Cynthia Lummis (R-Wyo.), Kirsten Gillibrand (D-N.Y.), Roger Marshall (R-Kan.), and Elizabeth Warren (D-Mass.). This amendment seeks to establish examination standards for financial institutions engaged in crypto activities. Additionally, it calls on the Treasury Department to provide recommendations to Congress concerning crypto mixers.
The evolving status of the crypto amendment
The proposed amendment is currently undergoing revisions and negotiations. Senator Lummis conveyed the dynamic nature of this legislative endeavor during the Blockchain Association Policy Summit, stating,
“I hear rumors, and that’s all they are, that it may get caught up in some other negotiations, and I don’t know whether it’s going to survive. But we should know more early next week.”
Industry stakeholders, while keeping a close eye on these developments, are cautiously optimistic about the proposed crypto amendment. Cody Carbone, Vice President of Policy for the Chamber of Digital Commerce, noted that this amendment represents a compromise that the crypto industry can accept. However, he also expressed reservations about another bill put forth by Senator Warren.
A delicate balancing act
Senator Warren’s bill seeks to tighten regulations around crypto usage, with a particular focus on combating money laundering and sanctions evasion. This includes extending “know-your-customer” requirements to miners and wallet providers. While these measures aim to enhance security and accountability in the crypto space, critics argue that they may impose excessive burdens on certain industry players.
“We just don’t want to create new standards and burdens on some of these players in the ecosystem that aren’t relevant, which is what Warren’s bill would do for miners and validators who don’t work with customers. So we think this is a good compromise.”
In addition to the ongoing discussions surrounding the crypto amendment, Carbone expressed the Chamber of Digital Commerce’s support for the Financial Technology Protection Act.
This legislation proposes the establishment of a working group comprised of representatives from various federal agencies, including the Treasury. The group’s primary objective is to combat terrorism and illicit financing, reflecting the industry’s commitment to robust security measures.