Senior House Republicans have officially introduced a bill that seeks to change how crypto markets function in the United States. Republican members of the Agriculture and Financial Services Committees of the United States House have introduced this bill to create a regulatory framework for digital assets.
Submitted on July 20, the Financial Innovation and Technology 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 tackle regulatory gaps by establishing a comprehensive framework. The framework is expected to address the specific risks associated with various digital asset-related activities.
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Crypto Regulation Framework: Protecting Consumers And Fostering Innovation
The bill has been co-submitted by Glenn Thompson, Chairman of the House Committee on Agriculture, and French Hill, Chairman of the Subcommittee on Digital Assets. It primarily aims to safeguard consumers and promote innovation within the United States.
In addition to its consumer protection and innovation promotion goals, the bill also establishes criteria for classifying a digital asset as a commodity. The primary focus lies 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 systems. As part of this regulatory framework, market participants would be required to adhere to enhanced and comprehensive disclosure standards.
Furthermore, these participants may need to register with both relevant regulatory agencies for compliance purposes. The bill specifically outlines a streamlined process for crypto companies to register with two key financial regulators, the CFTC and the SEC.
The bill also seeks to modernize and update the outdated US securities laws when it comes to crypto. One significant amendment proposed in the bill is requiring the SEC to take into consideration the aspect of “innovation” as it is imperative to consider innovation when making regulatory decisions or taking any enforcement actions.
The bill stated:
Securities laws and regulations do not account for many of the unique characteristics of digital assets.
Focus On Integrating NFTs In Traditional Marketplaces
Under the provisions of the crypto regulation bill, both the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) would be obligated to collaborate with foreign regulators.
The objective is to establish uniform and consistent regulatory standards for digital assets and related activities across international jurisdictions.
This collaboration aims to reduce regulatory discrepancies. It also focuses on enhancing global cooperation and creating a more harmonized approach to governing the digital asset space.
Additionally, the bill mandates the Government Accountability Office (GAO) to conduct a comprehensive study on nonfungible tokens (NFTs). It also urges GAO to integrate NFTs within traditional marketplaces.
This study will delve into various aspects of NFTs. This includes a study on their functioning, impact on markets, potential risks, and possible implications for consumers and investors.
This is not the only crypto bill being proposed by US lawmakers. Last week, Senators Cynthia Lummis and Kirsten Gillibrand introduced a new version of their bipartisan Responsible Financial Innovation Act which will now compete with the crypto regulation bill.