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US Legislators Propose New Crypto Legislation for Enhanced Regulatory Clarity
Members of the United States House Financial Services Committee and House Agriculture Committee have unveiled a draft proposal offering a potential route for certain crypto assets to be recognized as digital commodities.
The discussion draft, released on June 2, suggests the establishment of a "practical framework" aimed at providing clear regulations for crypto businesses operating in the US. This proposed legislation aims to prevent the U.S. Securities and Exchange Commission (SEC) from barring digital asset trading platforms from registering as a regulated alternative trading system. Furthermore, it would permit such companies to offer "digital commodities and payment stablecoins."
New Legislation Criticizes SEC's Previous Approach to Crypto
The proposed bill challenges the SEC's prior approach to crypto regulation, which many in the crypto industry have criticized for its lack of clear guidelines. Under this proposed legislation, specific digital assets that are "functional and regarded as decentralized" could qualify as digital commodities. This would mandate the SEC to provide a comprehensive analysis of any objections to a firm's classification as decentralized.
"The Act also calls for the SEC to amend its rules to permit broker-dealers to hold digital assets, subject to certain conditions," the draft stated. "Moreover, the Act necessitates the SEC to devise regulations to update certain rules for digital assets."
Response to the Proposed Legislation
Paul Grewal, the chief legal officer of Coinbase, praised the draft bill, stating that it sets a solid groundwork for regulatory jurisdiction and definitions. However, he stressed the importance of thorough scrutiny before its formal presentation. This US-based crypto exchange has recently launched an ad campaign advocating adoption, leading up to a lobbying-centric event in Washington, D.C., slated for July.
Proposed by House Financial Services Committee Chair Patrick McHenry and House Agriculture Committee Chair Glenn Thompson — both Republicans — the bill has yet to receive contributions from legislators across the political divide. While Democrats and Republicans have occasionally shown a propensity towards a bipartisan approach to crypto regulation, it remains uncertain how far this proposed legislation will progress in a politically divided Congress.
As of the time of writing, both the House and Senate lawmakers in the U.S. have passed legislation to prevent the government from defaulting by increasing the debt ceiling. President Joe Biden is anticipated to sanction the bill into law on June 2.
