US House Republicans Launch A New Digital Asset Regulatory Bill

July 21, 2023 - Around 3 mins mins to read

Key Points:

US House Republicans members have introduced a new digital asset regulation bill.
The bill aims to establish a regulatory framework to protect investors in the crypto space and outlines the authority of the SEC and CFTC over crypto.
The amendment bill that excludes a range of traditional securities from the “digital asset” category could signal tightening for Defi.

On Thursday, US House Republicans members introduced a new digital asset regulation bill, the 21st Century Financial Innovation and Technology Act, which aims to establish a regulatory framework to protect investors in the crypto industry.

US House Republicans Launch A New Digital Asset Regulatory Bill

“Today’s introduction of the Financial Innovation and Technology for the 21st Century Act marks a significant milestone in the House Committees on Agriculture and Financial Services’ efforts to establish a much-needed regulatory framework that protects consumers and investors and fosters American leadership in the digital asset space,”
Chairman of the House Committee on Agriculture Rep. Glenn “GT” Thompson (R-Pa.) said in a statement.

The current need for clarity on digital asset management and enforcement actions is causing crypto businesses to consider leaving the United States and preventing startups from establishing in the country.

Thursday’s bill, drafted initially in early June, seeks to pave the way for cryptocurrency exchanges to register with the US Securities and Exchange Commission (SEC) and allow them to trade digital securities, commodities, and stablecoins.

The bill introduced in recent years aims to create comprehensive rules for digital assets, coming at a time when both regulators and participants in the crypto market have noticed a need for regulatory clarity.

A wave of aggressive enforcement actions by regulators, especially the SEC and CFTC, is prompting established crypto businesses to consider leaving the US and preventing startups from forming there. In addition, the bill will clarify the powers of the SEC and CFTC in regulating crypto companies.

“The crypto industry wants clarity and our collaborative bill gives both the CFTC and SEC a seat at the table. Our bill establishes clear principles to ensure financial security and certainty as digital asset developers continue to innovate,”
Dusty Johnson (R-S.D.) said in the statement.

The revised bill removes a range of traditional securities from the definition of “digital assets,” such as stocks, bonds, “transferable shares,” “interest certificates, or entering into any profit-sharing arrangement,” among others.

This is seen as a signal to watch out for in the Defi sector by Gabriel Shapiro, general counsel of Delphi Labs, noting that a range of assets found in the decentralized finance (DeFi) market, such as Compound’s cToken or Liquid Collective’s Liquidity Staking Token, will be strictly regulated under this provision even if they are not under applicable law.”

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Market