On Thursday, senior House Republicans proposed much anticipated legislation aimed at addressing the lack of clarity surrounding the digital asset industry’s regulation. The bill, officially known as “Financial Innovation and Technology for the 21st Century Act,” comprises 212 pages and calls for formal definitions of “blockchain” and “digital asset” to be included in existing financial laws. This framework aims to clarify the regulatory positions of both the CFTC and the SEC in the realm of cryptocurrency oversight.
Despite the scepticism towards the regulatory future of blockchain and digital assets, prominent members have shown evident support for the bill, key among them Rep. Glenn Thompson (R-Pa.), Rep. French Hill (R-Ark.), and Rep. Dusty Johnson (R-S.D.), all contributing to various subcommittees associated with digital assets and financial technology. However, two particularly noticeable supporters are Rep. Tom Emmer (R-Minn.) and Rep. Warren Davidson (R-Ohio), both known for their active advocacy in the crypto space.
The bill’s characteristic element is the proposed certification process for recognizing blockchains as decentralized. This feature, if implemented, would enable the SEC to challenge declarations made by token issuers regarding the meeting of specified standards. Digital asset issuers, under the new guidelines, will need to comply with a disclosure routine, furnishing critical details about their project’s financial plan, development trajectory, and associated risks, including providing their project’s source code.
The legislation’s goal is to establish clear guidelines for classifying digital assets. It emphasizes that the existence of an investment contract does not automatically brand a token as a security. The co-sponsors suggest that a substantial 70% of crypto tokens ought to be considered as commodities rather than securities. For firms aspiring to serve as intermediaries, a registration process with the SEC has been suggested.
Glenn Thompson (R-PA), Chairman of the House Committee on Agriculture, substantiates that the bill is intended to fill regulatory voids in the industry. Characterizing it as a “landmark”, he stressed its dual objective of safeguarding consumers and promoting innovation within the US.
Nevertheless, the bill has also received its share of resistance, mainly from House Democrats. Many argue for a more substantial part for the SEC in the digital asset market’s supervision than what is currently proposed, highlighting that despite its seemingly comprehensive nature, the bill may still leave room for discussion and interpretation among market participants.
Source: Cryptonews
