Democrats Propose Changes to US Crypto Legislation as Progress Stalls
Lawmakers are debating new amendments to the crypto framework, causing delays in the legislative process.
Last week, Senate Democrats introduced a counterproposal to the cryptocurrency framework legislation, resulting in significant concerns among industry insiders regarding potential delays in establishing clear regulations for blockchain technology.
The yet-to-be-unveiled proposal allegedly includes stringent regulations governing decentralized finance (DeFi) protocols, introducing a “restricted list” that could classify certain protocols as too high-risk.
Industry representatives fear these measures are crafted in bad faith, as expressed by Zunera Mazhar, Vice President of Policy and Government Affairs at the Digital Chamber, who stated that the legislation grants “sweeping authority” while narrowly defining decentralization.
As discussions around the bill have come to a standstill, Senate leaders are unable to decide on a markup date, according to reports.
The CLARITY Act passed the House in September and moved to the Senate, where it became the RFIA. Source: Legiscan
During the initial discussions, Tim Scott, Chair of the Senate Banking Committee, had anticipated that the Responsible Financial Innovation Act (RFIA) would receive approval by the end of September; however, this timeframe has now lapsed, intensifying the political deadlock.
On a related note, industry leaders like Summer Mersinger, CEO of Blockchain Association, voiced alarm over the Democrats’ suggestion to maintain a restricted list, claiming it could stifle decentralized finance in the US and compel development to relocate abroad.
Mazhar pointed out the outdated nature of the proposed regulations, suggesting that focus should instead be on aims that target illicit finance challenges and establish proportional oversight.
As the dialogue surrounding the RFIA progresses, it remains unclear if collaboration between parties will resume.
Scott wished for the bill to be passed by September 30. Source: Mario Nawfal
Analysts and commentators continue to express concern over the partisan divide and its implications for the advancement of the landmark crypto industry bill.
