A leaked email shows that US Democratic leaders "strongly oppose" two Republican-led cryptocurrency bills but will not force House members to vote against them.
According to an email shared by foreign media "POLITICO" and sent by Democratic leaders to House members on Monday, May 20, the party did not urge members to vote against the "21st Century Financial Innovation" that will be voted on this week. and Technology Bill” (FIT21) and the “CBDC Anti-Surveillance State Bill.” If passed, these two bills are believed to have a positive impact on the cryptocurrency industry.
POLITICO reporter Eleanor Mueller wrote when referring to FIT21 on the X platform:
"As far as I know, House Democratic leaders said today that they will not force opposition to the House Republicans' cryptocurrency bill."
However, emails show that Reps. Maxine Waters and David Scott are “strongly opposed” to FIT21, with Waters also opposing the CBDC bill. POLITICO reporters later obtained a letter from the two lawmakers in which they urged a vote against FIT21.
FIT21 primarily provides a clear process for determining which digital asset transactions fall within the jurisdiction of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), and also outlines disclosure requirements for digital asset developers. The U.S. cryptocurrency industry and lobbyists support the bill, with 60 companies urging its passage in a May 16 letter to House leadership.
The CBDC Anti-Surveillance State Act was proposed by Republican Congressman Tom Emmer. If passed, the bill will limit the Federal Reserve's power in central bank digital currency (CBDC).
Objections
Democratic leaders took issue with parts of FIT21, writing in an email:
“The bill also provides for a process whereby digital commodities may be traded on the secondary market if they were originally issued as part of investment contract securities. This language undermines decades of legal precedent and case law, thereby providing Our traditional securities markets create uncertainty.”
Democratic leaders also argued that the bill "weakens investor protections and opens the door to fraud and market manipulation" because it provides a "safe harbor" where certain entities can submit intentions to register. This effectively circumvents SEC supervision until the SEC and CFTC finalize cryptocurrency rules.
Meanwhile, Democratic leaders believe that the CBDC Anti-Surveillance State Act's restrictions on the Federal Reserve will hinder "the primacy of the dollar" as other countries seeking to circumvent sanctions are advancing their own CBDCs. The email also stated:
“According to the U.S. Congressional Budget Office (CBO), the bill’s definition of CBDC is too broad, raising concerns that the bill could weaken the Federal Reserve’s ability to conduct monetary policy as it attempts to guide a soft landing of inflation. Particularly worrying.”
According to POLITICO reporters, the FIT21 bill is expected to be debated and passed by the House of Representatives on Wednesday, May 22.
