Dueling U.S. Bills From Warren and Emmer Seek to Regulate and Restrict Digital Assets
By Noah Washington October 9, 2023
- Senator Elizabeth Warren introduced the Digital Asset Anti-Money Laundering Act to expand regulations and anti-money laundering requirements for the crypto industry
- The bill has received bipartisan support and endorsement from organizations like AARP, reflecting growing concern about crypto's role in illegal activities
- In contrast, Rep. Tom Emmer has reintroduced legislation to prohibit a central bank digital currency, citing privacy concerns
Senator Elizabeth Warren has introduced a bipartisan bill to combat money laundering in the cryptocurrency industry. The bill, which has often been called "anti-crypto", has gained considerable support across party lines, reflecting growing concerns about illicit activities facilitated by crypto. This legislative effort represents the latest attempt to impose regulations on the largely unregulated crypto sector.
This article delves into the details of the bill, its objectives and the notable endorsements it has received. Additionally, it's important to explore Senator Warren's history of anti-crypto policies and the resurgence of Representative Tom Emmer's CBDC Anti-Surveillance State Act.
The Warren Bill Overview
The Digital Asset Anti-Money Laundering Act, spearheaded by Senator Elizabeth Warren, is a legislative effort that seeks to bolster regulatory oversight within the cryptocurrency industry.
With the digital asset ecosystem expanding at an unprecedented rate, the bill aims to plug existing regulatory loopholes and bring digital assets more in line with anti-money laundering and countering the financing of terrorism (AML/CFT) frameworks that govern traditional financial systems.
A particularly alarming statistic that has prompted the bill's introduction is the dramatic surge in illicit digital asset usage, amounting to a staggering $20 billion. Even more concerning is the revelation that 44% of these transactions have been linked to sanctioned entities in the past year, raising red flags about the cryptocurrency industry's susceptibility to nefarious activities.
Expanding Bank Secrecy Act
To tackle these issues head-on, Senator Warren's bill proposes an expansion of the Bank Secrecy Act and the implementation of stringent know-your-customer (KYC) requirements. These requirements would apply not only to cryptocurrency exchanges but also extend to digital asset wallet providers, miners and various other participants operating within cryptocurrency networks.
The bill's ultimate goal, as emphasized by Senator Joe Manchin, is to mitigate the security risks inherent in cryptocurrency platforms and bring them under the same AML regulations that traditional banks adhere to.
In a letter addressed to lawmakers, the AARP expressed support for the bill, highlighting the importance of protecting consumers and investors in the evolving digital asset landscape. This endorsement from a reputable organization further solidifies the bill's standing and underscores its potential to enact meaningful change in the cryptocurrency space.
Warren's Anti-Crypto History
Senator Elizabeth Warren's involvement in crafting and championing this legislation should not come as a surprise, considering her history of anti-crypto policies. The Massachusetts lawmaker has long been vocal about her concerns regarding cryptocurrency.
In the past, she has gone as far as characterizing cryptocurrency as a "method of choice" for sanctioned countries like Iraq and Russia. These statements have shed light on her view of the cryptocurrency industry as a potential facilitator of illicit activities, further fueling her commitment to anti-money laundering measures.
During her re-election campaign in March, Senator Warren made headlines by openly declaring her intention to "build an anti-crypto army" in the United States. This ambitious statement underscored her dedication to imposing stringent regulations on the cryptocurrency industry, even as it continues to gain mainstream acceptance.
Emmer's CBDC Anti-Surveillance State Act
In a parallel development, Representative Tom Emmer has reintroduced his CBDC Anti-Surveillance State Act to Congress. This legislation, originally proposed in response to concerns about central bank digital currencies (CBDCs), seeks to prevent unelected bureaucrats in Washington from issuing a CBDC.
A CBDC is a digital form of money issued by a central bank that serves as legal tender. It can benefit governments by giving them greater control over the money supply, enabling direct fiscal transfers, reducing tax evasion and promoting financial inclusion. Emmer, a Republican, contends that such a currency could be utilized as a surveillance tool, undermining the financial privacy of American citizens.
CDBC competitor stablecoin USDC's market cap the past year. Source: CoinGecko
This bill, now backed by 49 original co-sponsors, places significant emphasis on safeguarding the rights of Americans to maintain their financial privacy. It specifically prohibits the Federal Reserve from issuing a CBDC to individuals and precludes the use of a CBDC in implementing monetary policy. Emmer's concerns regarding CBDCs echo broader worries about the potential weaponization of money and the government's expanded control over financial transactions.
Joining Representative Tom Emmer in his quest to protect financial privacy are Senators French Hill, Warren Davidson, and Mike Flood. Their support signifies a growing bipartisan concern regarding the potential consequences of CBDCs on personal financial privacy and individual
Policy Around Crypto Could Transform
The cryptocurrency regulatory landscape is evolving rapidly, driven by bipartisan support for anti-money laundering measures and concerns surrounding digital currency surveillance.
Senator Elizabeth Warren's Digital Asset Anti-Money Laundering Act represents a pivotal step in addressing these concerns within the cryptocurrency industry. Additionally, the resurgence of Representative Tom Emmer's CBDC Anti-Surveillance State Act underscores the importance of safeguarding financial privacy in the digital age.
With backing from leading voices in Congress, these legislative efforts could transform how cryptocurrencies are overseen and determine the extent of privacy protections for digital finance in America.