Top House Republicans have officially introduced a bill that seeks to change how crypto markets work in the United States. The Republican members of the United States House Committees on Agriculture and Financial Services have introduced this bill to create a regulatory framework for digital assets.
Introduced on July 20, the Financial Technology and Innovation for the 21st Century Act represents an effort by US lawmakers to promote collaboration between two major federal regulators. These include the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).
The 212-page bill aims to address regulatory gaps by establishing a comprehensive framework. The framework is expected to address the specific risks associated with various activities related to digital assets.
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Crypto Regulatory Framework: Protecting Consumers and Fostering Innovation
The bill has been co-introduced by Glenn Thompson, Chairman of the House Agriculture Committee, and French Hill, Chairman of the Digital Assets Subcommittee. Its main objective is to safeguard consumers and promote innovation within the United States.
In addition to its consumer protection and innovation promotion objectives, the bill also establishes criteria for classifying a digital asset as a commodity. The main focus is on decentralization.
If a digital asset meets these conditions, it becomes eligible to be traded as a digital asset commodity on SEC-registered digital asset trading facilities. As part of this regulatory framework, market participants would be required to adhere to enhanced and comprehensive disclosure standards.
Additionally, these participants may be required to register with both relevant regulatory agencies for compliance purposes. The bill specifically outlines a streamlined process for cryptocurrency companies to register with two key financial regulators, the CFTC and the SEC.
The bill also seeks to modernize and update outdated US securities laws as they relate to cryptocurrencies. A significant proposed amendment in the bill requires the SEC to take into account the aspect of “innovation” since it is imperative to consider innovation when making regulatory decisions or taking any enforcement action.
The bill stated:
Securities laws and regulations do not take into account many of the unique characteristics of digital assets.
Focus on integrating NFTs into traditional markets
Under the provisions of the crypto regulation bill, both the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) would be required to collaborate with foreign regulators.
The objective is to establish uniform and consistent regulatory standards for digital assets and related activities in all international jurisdictions.
This collaboration aims to reduce regulatory discrepancies. It is also focused on enhancing global cooperation and creating a more harmonized approach to governing the digital asset space.
Additionally, the bill requires the Government Accountability Office (GAO) to conduct a comprehensive study on non-fungible tokens (NFTs). It also urges the GAO to integrate NFTs into traditional markets.
This study will delve into various aspects of NFTs. This includes a study on its operation, impact on the markets, potential risks and possible implications for consumers and investors.
This is not the only cryptocurrency bill proposed by US lawmakers. Last week, Senators Cynthia Lummis and Kirsten Gillibrand introduced a new version of their bipartisan Responsible Financial Innovation Act that will now compete with the cryptocurrency regulation bill.
Total crypto market capitalization was $1.16 trillion on the one-day chart | Source: TradingView
Featured image of, chart from TradingView.com
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