The US House of Representatives recently passed a significant piece of legislation aimed at curbing the illicit use of digital assets. Dubbed the Financial Technology Protection Act, this bill received a majority voice vote on July 22, marking a critical step in the legislative process to enhance the oversight of cryptocurrencies.
Introduced in April 2023 by Representatives Zach Nunn and Jim Himes, the Financial Technology Protection Act seeks to address potential security risks associated with digital currencies. Specifically, the legislation targets the use of cryptocurrencies by “rogue and foreign nations” to circumvent international sanctions. The bill proposes the creation of a working group composed of members from various federal agencies and the crypto industry to explore effective countermeasures.
Composition and Role of the Working Group
The working group advocated by the bill is set to include five prominent leaders from the cryptocurrency industry, alongside representatives from the Justice Department, Internal Revenue Service, and the Office of Foreign Assets Control, among others. This group’s primary mandate will be to facilitate coordinated efforts across federal agencies to detect and deter financial crimes involving digital assets.
Representative Nunn emphasized the dual objectives of the bill: enhancing national security and preserving consumer choice. “This bipartisan bill will help ensure the United States is prepared to address security risks and prevent illicit money laundering while also protecting consumer choice for all Americans,” Nunn stated. He underscored the importance of balancing security measures with the integrity of digital assets.
The Financial Technology Protection Act is one of several cryptocurrency-related bills that have moved through the House Financial Services Committee in July 2023. Another notable bill, the Financial Innovation and Technology for the 21st Century (FIT21) Act, was approved by House members in May and is currently awaiting consideration in the Senate.
The trajectory of crypto-related legislation may be influenced by the broader political environment, especially with the upcoming US election. Although it is uncertain how the election results might affect lawmakers’ approaches to cryptocurrency regulation, the legislative landscape is poised for potential changes depending on electoral outcomes.
Presidential Veto and Regulatory Considerations
Earlier, President Joe Biden vetoed a resolution that had passed both the House and Senate. This resolution aimed to overturn a Securities and Exchange Commission (SEC) rule requiring banks to record cryptocurrencies as liabilities on their balance sheets, illustrating the complex interplay between legislative actions and executive decisions in regulating financial technologies.
| Date | Event | Description |
|---|---|---|
| April 2023 | Bill Introduced | Representatives Zach Nunn and Jim Himes introduce the bill. |
| July 22, 2023 | House Approval | The bill passes the House by voice vote. |
| July 2023 | Committee Progress | The bill moves out of the House Financial Services Committee. |
| Ongoing | Senate Consideration | The bill awaits action in the Senate. |
The passage of the Financial Technology Protection Act by the US House of Representatives represents a significant step toward regulating the use of cryptocurrencies in potentially illegal activities. As this bill progresses through the legislative process, its implications for both national security and the cryptocurrency industry will be closely monitored.
Featured image credit: DonkeyHotey via Flickr
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