While new regulations aimed at further regulating cryptocurrencies and the blockchain are being prepared across the Atlantic, the major players in the sector are busy carrying out major lobbying campaigns. This new trend testifies to the great popularity now enjoyed by companies specializing in cryptocurrencies.
Many measures targeting cryptocurrencies are coming
Several federal agencies and organizations are preparing texts to regulate the use of cryptocurrencies in the United States. Indeed, the recent drop in the price of Bitcoin increases the pressure on regulators, while some investors suffer heavy losses. That’s why the Treasury Department is preparing to specify which cryptocurrency companies will have to disclose user information as part of the infrastructure bill.
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The Securities and Exchange Commission (SEC), the federal agency responsible for regulating and supervising the financial markets, as well as the Commodity Futures Trading Commission, which regulates commodity exchanges, have announced that action will be taken against companies that do not comply with their rules. The SEC also wants to get more involved in cracking down on cryptocurrency firms that issue or trade securities without registering with the agency.
Also, the Internal Revenue Service, which collects income tax, the Office of the Comptroller of the Currency, responsible for regulating and supervising the national banks established in the United States and the Federal Reserve, the central bank of the countries, plan to issue new measures soon that could have a significant impact on the profits made by players in the cryptocurrency sector. Moreover, the Binance exchange platform is currently the subject of two investigations by three agencies.
Additionally, the Federal Reserve is preparing to release a report on how a digital dollar could fit into the United States’ long-term plans for its payments system, reports Bloomberg. Clearly, state digital currencies will directly compete with cryptocurrencies, and more specifically stablecoins, which are pegged to dollars. Indeed, several agencies plan to publish information on how they plan to deal with this type of cryptocurrency.
The Capitol, emblem of the legislative power in the United States. Photography: Adam Szuscik / Unsplash
Lobbying spending on the rise
In order to be able to sway lawmakers in their favor, cryptocurrency companies are not shy about spending and some are getting into the lobbying business for the first time. Thus, firms specializing in stablecoins or even in NFTs register their first lobbying firms, and do not hesitate to give more to politicians as the mid-term elections approach on the other side of the Atlantic.
Moreover, donations from players in the cryptocurrency sector are quickly becoming an important source of income for certain political figures. In the first three quarters of 2021, about one-third of Republican Congresswoman Cynthia Lummis’ campaign committee contributions from Wyoming came from executives or cryptocurrency investors. As a result, the lawmaker said she plans to introduce legislation this year that would allow cryptocurrency companies to set up their own body in order to self-regulate.
In addition, Arizona Democratic Senator Kyrsten Sinema has also received large sums from the same donors. The most well-known players in the sector are also accelerating their lobbying strategies. Coinbase spent $625,000 on this in Q3 2021, up from $60,000 in the same period a year earlier. Similarly, the Blockchain Association, which “ represents reputable leaders in the US blockchain and cryptocurrency industry said he spent twice as much on lobbying in 2021 as the previous year.
Cryptocurrencies weigh more and more
These efforts are starting to pay off. ” The Tone Around Crypto Has Absolutely Taken a Positive Turn in Washington says Kristin Smith, executive director of the Blockchain Association. She further assures that the body has been in regular contact with people working on cryptocurrency legislation, as well as agencies drafting rules relating to tax reporting requirements and anti-money laundering provisions. .
Cryptocurrency adoption is exploding around the world. Logically, governments legislate to better regulate them. It remains to be seen what direction will be taken by the American authorities, who could become precursors in the field in the West. It should nevertheless be noted that across the Atlantic, the power of lobbying is immense and this practice could therefore soften the vehemence of legislators…
One thing is certain: resorting to lobbying shows that the cryptocurrency sector is no longer to be taken lightly, since it now has political weight in the world’s leading power.