House Republicans have unveiled legislation they say fills in gaps in the country’s cryptocurrency regulations.
The draft proposal, authored by Reps. Patrick McHenry of North Carolina and Glenn Thompson of Pennsylvania, gives the Commodity Futures Trading Commission (CFTC) explicit spot market authority over crypto commodities under existing law. At the same time, the Securities and Exchange Commission (SEC) would be responsible for regulating digital-asset securities.
“Our goal is to strike the appropriate balance between consumer protection and encouraging responsible innovation,” McHenry, House Financial Services Committee chair, said in a Friday (June 1) news release.
He added that the draft results from an “unprecedented joint effort” between his committee and the House Agriculture Committee, “which gives us a better shot at striking that balance. I encourage stakeholders and market participants to provide constructive feedback to help us improve our legislation.”
The draft argues that the current guidelines hamper innovation and fail to protect consumers. To remedy this, the bill would bar the SEC from preventing an alternative trading system (ATS) from listing crypto securities and require the commission to modify its rules to allow broker-dealers to custody digital assets.
The bill’s authors say these measures are designed to create a more favorable environment for market participants and promote increased efficiency in the crypto space.
The draft bill will likely be reshaped and modified over the coming weeks and months, with the House Agriculture Committee set to hold a hearing on digital asset regulation on June 6, where this bill will likely be a topic of discussion.
The proposed legislation comes at a time when cryptocurrency companies have been asking for more regulatory clarity, and have argued that the country’s approach to their industry has forced them to consider moving their business offshore.
Meanwhile, other nations are moving forward with their own crypto regulations, like the ones adopted by European Union countries last month.
“Recent events have confirmed the urgent need for imposing rules which will better protect Europeans who have invested in these assets, and prevent the misuse of crypto industry for the purposes of money laundering and financing of terrorism,” said Swedish finance minister Elisabeth Svantesson, whose country holds the EU presidency.
The rules, expected to be rolled out in 2024, require companies to get a license if they wish to issue, trade and safeguard crypto assets, tokenized assets and stablecoins in the EU.