July 28, 2023
House Financial Services approves major bills establishing regulatory framework for cryptocurrency assets
Hopes for a bipartisan stablecoins bill fade as White House, Fed voice objections
The House Financial Services Committee on July 27, in a session that lasted until 10:30 pm, completed a two-day markup of major bills that would create regulatory frameworks for digital assets generally (HR 4763) and for payment stablecoins specifically (HR 4766), as well as several other bills related to digital assets; environmental, social and governance (ESG) issues; fentanyl; Russia and other areas. Committee Republicans were able to attract the support of six Democrats for their broad "market structure" cryptocurrency bill, which establishes rules for the road by designating some digital assets as SEC-regulated securities and others as commodities regulated by the Commodity Futures Trading Commission (CFTC). But a negotiating process that had fostered hopes for a related, bipartisan stablecoins bill broke down on Thursday when the White House raised objections and Democrats asked to postpone the bill's consideration until after the August recess, but Republicans pivoted to a previous draft of the bill and went ahead. Five Democrats supported the stablecoins bill despite the partisan discord.
Separately, the House Agriculture Committee, which has jurisdiction over the CFTC, on July 27 approved, by voice vote, its piece of the market structure bill (HR 4763) that gives the CFTC broad new authority to classify certain digital assets as commodities and to register digital commodity exchanges and service providers. Importantly, the committee included an authorization of $120 million over three years to fund the additional responsibilities the bill gives the CFTC.
The committee's web pages with materials on the markups are posted here (Wednesday) and here (Thursday). Attached with this Tax Alert please find PDFs of a section-by-section summary of the 200-page market structure crypto bill (HR 4763) and a committee document itemizing changes made to the previous discussion draft of that bill.
Additional information is also available in the attached Tax Alert.
House Financial Services crypto markup
Market structure bill section-by-section
Changes to market structure draft