US Senate fails to advance cryptocurrency regulation bill

Ga. (Atlanta News First) — A key vote on the Clarity Act – Congress’ first comprehensive attempt to federally regulate cryptocurrency – failed a major procedural vote on Tuesday

The Clarity Act, shorthand for the Digital Market Asset Clarity Act, would have set ground rules for regulating the fast-growing digital currency market, including which federal agency would have oversight, how it would be taxed and how banking would be handled.

The Senate was unable to reach the 60 votes necessary to bring the act to the floor for a vote. The U.S. House of Representatives had already passed a different version of the bill, and the Senate’s changes once it reached their chamber mean the bill would eventually have to go back to their House colleagues for final passage.

The legislation was billed by crypto industry leaders as a game changer in the emerging market. As of right now, cryptocurrency is regulated through a patchwork of state laws and some White House executive orders, which are subject to change depending on who is in office. The Biden White House was fast to crack down on growing the cryptocurrency industry, while President Donald Trump has done the opposite, even investing in cryptocurrency himself.

Meanwhile, it keeps growing. A Pew Research Center report from June shows one in five Americans has used cryptocurrency.

“As with many technology scenarios, regulation always tried to catch up,” said Ramnath Chellappa, a professor of information systems at Emory University’s Goizueta Business School. “The discussion or the question about the legality of crypto, I think we are well past that. People are using it, and not only individuals, but we have banks and we have ETFs [exchange-traded funds] and everybody investing in it.”

Lawmakers seemed gridlocked not over the fact that digital money needs to be regulated, but how. The 600-plus-page bill includes recommendations for the Securities and Exchange Commission as well as the Commodity Futures Trading Commission to split duties on oversight of crypto, and laid out regulations for banks to be able to accept the currency.

Chellappa says it’s a difficult distinction to make, deciding whether to govern crypto as a true currency or a commodity.

“But at least it says that institutions that deal with it will now be subject to regulation, which is always a good thing,” he said. “They will handle this more carefully.”

Georgia lawmakers who voted no on the Clarity Act’s procedural vote Tuesday also seemed to have concerns over the potential for the legislation to enrich the president, who has publicly disclosed purchases of cryptocurrency.

“Like many of my Democratic colleagues, I was ready to continue negotiations and make reasonable compromises to provide much-needed regulatory certainty,” said Georgia Democratic Sen. Raphael Warnock. “But I will never look away when it comes to the President illegally enriching himself at the expense of the American people. To make it plain: Senate Republicans gave us no choice.”

“It is challenging to negotiate crypto policy while the president’s crypto business is receiving hundreds of millions of dollars in suspicious transactions,” said Georgia Sen. Jon Ossoff, a fellow Democrat. “I will continue working with colleagues on both sides of the aisle to develop a regulatory framework that protects consumers, supports economic growth, and prevents presidential corruption.”

Other members of Georgia’s congressional delegation, including GOP Rep. Mike Collins, who is challenging Ossoff for his Senate seat this fall and is himself a user of cryptocurrency, defended the bill as necessary.

“Rep. Collins supports commonsense policies like the Clarity Act because it protects consumers, prevents fraud, and reinforces America’s position as the leader in the global financial system,” said a spokesperson with Rep. Collins’ office.

There is another Georgia tie, Chellappa said, to cryptocurrency. Atlanta is home to BitPay, a major cryptocurrency payment processor. The company’s role helping businesses worldwide process cryptocurrency puts Atlanta square in the middle of the future of digital currency.

“It’s not just a Wall Street or a Silicon Valley type of question,” he said. “Payment transactions, a massive percentage of that, goes through Georgia and Atlanta.”

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