Lawmakers from the U.S. House of Representatives called for a new regulatory framework for crypto-assets because the current regulatory structure hinders innovations and fails to adequately protect consumers.
House Financial Services Committee Chair Patrick McHenry and House Agriculture Committee Chair Glenn Thompson introduced a legislative bill that would require certain cryptocurrency assets to be recognized as digital commodities and freely traded in the market.
Officials stated that the main purpose of the bill is to bridge the gap between the authority of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), thereby bringing regulatory clarity.
The key changes proposed by officials, according to the drafted bill, are:
- Digital assets would be defined by law as digital commodities or securities, depending on their characteristics. For this, they must operate on a decentralized network.
- Platforms for trading digital assets would be allowed to register as alternative trading systems. The SEC would have to change its rules and not prevent such platforms from holding digital assets if they qualify.
- Companies in the U.S. would be free to offer digital commodities and payment stablecoins after registration.
- Marketplaces and providers of digital goods would have to meet minimum capital and reporting requirements. Their trading activities would be overseen by the CFTC.
- The same registrant would be able to obtain approvals from both regulators. This would require the CFTC and the SEC to coordinate their efforts in financial technologies and create special committees to facilitate innovations.
- Existing digital assets would be able to continue trading during a “transition period,” that is, until the SEC or the CFTC issues a formal notice that a particular digital asset isn’t a digital commodity and must comply with regulatory requirements.
Some experts and representatives of the crypto industry appreciated McHenry and Thompson’s initiative. For example, Paul Grewal, Chief Legal Officer at Coinbase, noted that the proposed legislation provides a strong foundation for regulatory clarity of definitions in the regulation of cryptocurrencies in the United States. Paul also expressed hope that officials can “settle that protracted debate once and for all” over whether or not cryptocurrencies are securities.
However, the bill’s authors are both Republicans, and the proposed legislation was drafted without input from lawmakers from the other political party, so it’s open to question how far it will make it to Congress.
Lobbyists in the U.S. are actively calling on Congress to create a commission to develop a regulatory framework for cryptocurrencies and blockchain because the lack of clarity in this area has already made large market makers refuse to support crypto.
