What happened?
House Republicans have combined a ban on the Federal Reserve from creating a central bank digital currency (CBDC) with the CLARITY Act, a bill that introduces new rules for crypto markets. After the House voted on this combination in late September, these two bills will now move together, both having previously cleared the chamber in July.
Who does this affect?
This legislative action affects the entirety of the United States’ crypto market, and in particular, the Federal Reserve and how it manages digital currency. The decisions made will also impact how the Security Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) regulate and define digital assets, such as securities, commodities, or stablecoins.
Why does this matter?
The combination of these pieces of legislation and their subsequent rules could potentially change the landscape of cryptocurrency markets. Their effect on the Federal Reserve’s ability to create a CBDC could also significantly impact the U.S.’s role and power within the global digital economy. Therefore, the market implications are broad and far-reaching, affecting both national and international stakeholders.