The United States House Financial Services Committee is currently embroiled with deciding the future course of action when it comes to regulatory clarity for the crypto and blockchain space. Several pieces of legislation are under scrutiny, including the Financial Innovation and Technology for the 21st Century Act, Blockchain Regulatory Certainty Act, and Financial Technology Protection Act of 2023. These bills all hold the shared aim of dealing with the regulation of cryptocurrencies.
One bill seeing plenty of support is the Financial Innovation and Technology for the 21st Century Act. Its advocates argue that it would ward off failures akin to the collapse of the FTX exchange, though there are some reservations about it favoring cryptocurrency firms over consumers.
The bill is intended to elucidate the authority the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission hold over payment stablecoins. However, some critics, like Maxine Waters, believe the bill would still permit the blending of customer funds, making a situation similar to the one between FTX and Alameda Research possible. Such critics argue that an entirely new regulatory structure would have to be constructed instead of relying on the existing securities laws.
Interestingly, the divide is not strictly drawn along party lines. Democratic Representative, Jim Himes admits the legislation could have staved off FTX’s collapse, yet he confesses a lack of knowledge regarding certain crypto issues, including the recent judgment in the SEC vs Ripple case.
The bill proposes a $120 million fund to prop up the CFTC’s resources for dealing with crypto regulation, but Democrats have concerns about the reallocation of funds from the SEC, potentially curtailing its enforcement capacity.
While the fate of these bills remains undecided, these are merely a small portion in a series of legislative proposals attempting to fill the perceived regulatory gap in handling digital assets. Firms like Coinbase, Binance, and others are already facing SEC lawsuits, reinforcing the urgent need for comprehensive cryptocurrency legislation.
Of course, creating concrete crypto regulations is a complex endeavor, and it will inevitably face criticism from different parties. However, it is a task of paramount importance, once that aims to safeguard the interests of consumers in this rapidly evolving digital landscape. Based on the continuous discussions and proposed amendments, it is clear that the lawmakers are cognizant of various issues at stake and are striving to strike a balance between innovation and consumer protection.
Source: Cointelegraph
