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Lawmakers Push for More Regulation, Caution About Crypto

29 July 2022

Crypto may be rallying on Wednesday’s Fed rate hike but lawmakers are turning a wary eye towards the industry.

“Democrat politicians have contacted Fidelity Investments CEO Abigail Johnson demanding to know why the firm would offer an asset as “volatile, illiquid, and speculative” as Bitcoin in its 401(k) retirement plans.

“In a letter to Johnson on Wednesday, (U.S. Senators) Dick Durbin, Tina Smith, and Elizabeth Warren called the decision to allow Fidelity’s users access to the world’s biggest crypto “ill-advised” and “immensely troubling.”

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“According to the senators, given that there are so many different ways for Americans to invest in Bitcoin, ‘working families’ retirement accounts are no place to experiment with unregulated asset classes that have yet to demonstrate their value over time.’”

Meanwhile in the House, a bill to regulate so-called stablecoins is being pushed off until fall.

In a statement, Rep. Maxine Waters (D-CA) said, “Although the Ranking Member, Secretary Yellen and I have made considerable progress towards an agreement on the legislation, we are unfortunately not there yet, and will therefore continue our negotiations over the August recess.”

The House bill, a bipartisan collaboration between Waters and Rep. Patrick McHenry (R-NC), reportedly would require stablecoins to establish 1-to-1 reserves to back their assets.

Watching politicians trying to stake out a position on crypto is like watching stereotypical Boomers trying to deal with any platform beyond Facebook.

There are some pols who get what the industry needs — clarity regarding established regulations and a hands-off approach — but they are too few and far between.

What the industry needs is more advocacy for the crypto space, and less fear-mongering.