• Republican lawmakers have released a discussion draft to regulate digital assets in the US House Financial Services Committee and the House Agriculture Committee.
• The legislation seeks clarity on when a digital asset would be considered a security and how intermediaries can register with the SEC or Commodity Futures Trading Commission.
• A new joint CFTC-SEC Advisory Committee on Digital Assets could also be created, under the Act, which would provide advice to the SEC and CFTC on digital assets and require a joint study on decentralized finance.
Republican Lawmakers Release Discussion Draft
Republican lawmakers have released a discussion draft to regulate digital assets in the US House Financial Services Committee and the House Agriculture Committee. The legislation seeks clarity on when a digital asset would be considered a security and how intermediaries can register with the SEC or Commodity Futures Trading Commission.
Creating Framework for Digital Assets
The draft legislation creates a framework that would give the CFTC jurisdiction over digital commodities, while clarifying the SEC’s jurisdiction over “digital assets offered as part of an investment contract.” It also creates a process on how digital assets are treated and outlines certain terms regarding oversight of dually registered exchanges. Additionally, it sets up criteria for when certain digital assets will become decentralized and no longer under SEC’s jurisdiction, although there is an option for objection by providing detailed analysis by the SEC.
Joint CFTC-SEC Advisory Committee
A new joint CFTC-SEC Advisory Committee on Digital Assets could also be created, under the Act, which would provide advice to the SEC and CFTC on digital assets and require a joint study on decentralized finance. This committee is meant to find common ground between lawmakers who plan to introduce their own bills regarding cryptocurrency regulation.
Hearing Scheduled Next Week
The House Agriculture Committee plans to hold a hearing next week called “The Future of Digital Assets: Providing Clarity for Digital Asset Spot Markets” where they hope Rep Maxine Waters will join them in discussions about this legislation.
Conclusion
In conclusion, Republican lawmakers have released this discussion draft in order to create regulations surrounding digital asset markets which will help bring clarity around what constitutes as securities versus commodities as well as provide guidance about how intermediaries should interact with these markets. A hearing has been scheduled next week where they look forward to Rep Maxine Waters joining them in discussing this important piece of legislation further.