Proposed Bill Targets SEC To Bring Crypto Regulatory Clarity For US Lawmakers

Jun. 5, 2023
Proposed Bill Targets SEC To Bring Crypto Regulatory Clarity For US Lawmakers

U.S. lawmakers have unveiled a draft bill to provide regulatory clarity for the crypto industry. The bill has the potential to label certain crypto assets as digital commodities. The United States House Financial Services Committee and the House Agriculture Committee issued the proposed legislation.

It wants to create a functional framework to answer the concerns of the country’s crypto companies. The draft measure, released on June 2, attempts to prevent the SEC from denying digital asset platforms the status of regulated trading systems.

 

These platforms would then be able to supply “digital assets and payment stablecoins.” The legislation targets SEC’s unclear rules, aiming to boost growth in the crypto industry by addressing criticisms.

Under the proposed framework, digital assets deemed “functional and decentralized” would qualify as digital commodities. Furthermore, the law would force the SEC to conduct a thorough investigation into any challenges to a firm’s categorization as decentralized.

In addition, the Act requires the SEC to amend its rules to allow broker-dealers to store digital assets under specific situations. It also advocates for the progress of some digital asset restrictions.

Paul Grewal, Coinbase’s chief legal officer, described the preliminary draft for its ability to build a sound foundation for regulatory jurisdiction and terminology.

However, he noted the significance of a thorough examination before the official installation. The crypto exchange in the United States has begun a pro-adoption ad campaign ahead of a lobbying event in Washington, D.C., set for July.

Potential Implications Of The Proposed Legislation

Republican lawmakers Patrick McHenry and Glenn Thompson, who led the House Financial Services and House Agriculture Committees, introduced the proposal. However, it lacked input from MPs from all political parties.

The idea specifically excluded comments from members from the opposing political party. However, bipartisan efforts regarding crypto regulation have been seen in the past. How far this proposed legislation can progress in a divided Congress remains uncertain.

Around the moment of publishing, the United States House and Senate had enacted legislation to protect the country from defaulting by increasing the debt ceiling. President Joe Biden plans to officially sign the bill into law on June 2, underlining the country’s ongoing legislative activity.

The draft law is an important step toward tackling the regulatory problems that the crypto business faces in the United States. If passed, it has the potential to offer much-needed clarification to the categorization of crypto assets.

Consequently, this would pave the way for more sector expansion and approval. The framework’s focus on decentralization and functionality helps distinguish digital assets. It enables appropriate regulations based on their characteristics and uses cases.

However, given the current political climate and a split Congress, the bill’s destiny remains unknown. Both groups’ lawmakers may still need to find common ground on the proposed legislation.

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This development underscores the increasing acknowledgment of the need for robust and well-defined cryptocurrency regulations within the United States. As the discussions progress, stakeholders will closely monitor the bill’s journey and potential impact on the crypto industry.

Rida Fatima

News writer
An ardent wordsmith with a rich five-year background in delving into the realms of finance and cryptocurrencies. Alongside curating captivating blogs, Unique's talents extend to crafting imaginative and engaging content.

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