As the election approaches, Capitol Hill’s stablecoin lobbyists take action

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0xAyA
6 months ago
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A more crypto-friendly White House, or if Republicans control both chambers of Congress, could introduce policies more favorable to the industry.

Original author -Allyson Versprille & Bill Allison

Compile - Odaily 0xAyA

As the election approaches, Capitol Hill’s stablecoin lobbyists take action

Stablecoins are high-risk because these tokens are supposed to be backed by safe and highly liquid assets, such as U.S. dollars or Treasury bonds, and serve as a bridge between cryptocurrencies and the traditional financial system. Federal regulation would provide legitimacy to such assets, leading to wider adoption.

Regulation of stablecoins has been focused on by Biden administration officials, congressional Democrats, many of whom are skeptical of cryptocurrencies, and Republican lawmakers, who are generally considered friendlier to the industry.

Bipartisan interest in digital assets persists, even after the collapse of Sam Bankman-Fried’s FTX empire, and the two sides have further deepened their differences on other digital asset issues. This also coincides with the emergence of large amounts of lobbying funds, including Tether, which had the largest stablecoin issuance in the first three quarters of 2023.

Funding for lobbying on behalf of Tether Operations Ltd. jumped to $760,000 during that period, the sixth-highest amount among cryptocurrency companies and roughly double the previous year, according to federal disclosure data provided by OpenSecrets. Competitors of TetherCircle Internet Financial LLCthen byInvariant LLCrepresentatives, spending $300,000, up from $270,000 in the first three quarters of 2022.

A Tether spokesperson said the company is focused on shaping future digital asset policy through education and ongoing discussions with policymakers and regulators. Circle declined to comment.

Coinbase Global Inc. revealed that it spent more than $2 million in the first nine months of this year, a large portion of which was spent on stablecoins. includeBank of AmericaandVisaand other traditional financial companies as well asamerican chamber of commerceThere was also lobbying on the issue.

U.S. Chamber of Commerce Center for Capital Markets Competitiveness“We need policymakers to provide clear guidance on the regulation of payment stablecoins to facilitate the growth of the U.S. digital asset market,” Senior Vice President Bill Hulse said in an emailed statement.

Overall, 161 lobbying disclosure reports mentioned stablecoin legislation or regulation, a 79% increase from the 90 reports that mentioned the topic in the first three quarters of 2022, according to federal disclosures.

Cryptocurrency companies spend huge sums to sway stablecoin debate

As the election approaches, Capitol Hill’s stablecoin lobbyists take action

Source: Senate Public Records Office data

“A lot of people think the stablecoin bill will be passed this year,” focuses onCryptocurrency trade group Crypto Innovation Councilsaid Sheila Warren, CEO. So its not surprising that companies are spending more, she said: Its likely that number will carry over into next year. Her company spent $710,000 on various industry issues through lobbying in the first three quarters.

The front lines of the political battle over stablecoins arehouse financial services committee. In July, the Republican-dominated committee advanced a bill on tokens without the support of Maxine Waters, the committee’s top ranking Democrat. The committee chairman, Republican Patrick McHenry of North Carolina, and the California Democrat are expected to re-intensify negotiations in 2024.

“A busy year”

Cryptocurrency companies’ lobbying spending extends far beyond stablecoins,

Overall, these spendings are setting records. They spent $19.3 million in the first three quarters of 2023, surpassing their all-time high of $15.6 million in the same period last year, according to OpenSecrets.

The House Financial Services Committee and House Agriculture Committee have also advanced bills to clarify when the cryptocurrency industry is regulated by the Securities and Exchange Commission and when it is regulated by the Commodity Futures Trading Commission. The territorial battle between the two agencies has become a focus in the industry, with many players supporting the Commodity Futures Trading Commission gaining greater power.

“It’s been a very busy year, so there’s a lot to advocate for,” said Faryar Shirzad, chief policy officer at Coinbase. Shirzad said he expects industry spending to continue to increase in 2024.

After Coinbase, the largest spenders include Foris DAX Inc., also known as Crypto.com, the Blockchain Association and Binance entities such as Binance Holdings Ltd., which agreed to settle with several U.S. authorities in November to pay $4.3 billion .

Kristin Smith, head of the Blockchain Association, said her industry group’s goal is to “engage directly with policymakers, build relationships, and bridge education gaps to create a sound regulatory framework.”

Supporters of the digital asset are also opening their wallets for political donations ahead of the 2024 elections. A more crypto-friendly White House, or if Republicans control both chambers of Congress, could introduce policies more favorable to the industry.

A full year before the election, the industry is already lining up funding. Fairshake, a super PAC that supports pro-crypto candidates, announced this week that it raised $78 million. Its donors include Coinbase, Circle, Ripple and venture capital firm Andreessen Horowitz.

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