- Prominent Republican U.S. House of Representatives members introduce a bill to regulate crypto markets.
- The legislation aims to clarify registration requirements with the SEC or CFTC and determine if assets are commodities or securities based on blockchain decentralization.
- The bill needs Democratic support in Congress to pass, and some major lawmakers have expressed concerns.
A group of prominent House Republicans on Thursday introduced a long-awaited bill that, if passed, would provide a framework for governing crypto markets. The development follows the recent XRP ruling, which many experts saw as a step in the right direction for the industry.
The legislation will clarify when and how companies must register with the SEC (Securities and Exchange Commission) or the CFTC (Commodity Futures Trading Commission). Furthermore, it will bring clarity to assets that were introduced as potential security and will eventually become commodities.
Whether an asset is a commodity or a security is determined by whether the parent blockchain is sufficiently decentralized. The regulations surrounding crypto markets are still unclear in the United States, and current legislation looks forward to addressing them.
Glenn Thompson, chairman of the House Agriculture Committee, and Republican Reps French Hill and Dusty Johnson are spearheading the legislation. Financial Services Committee Chair Patrick McHenry of North Carolina also supported the legislation.
Will the bill affect crypto firms in the United States?
According to Thompson in a statement, the “introduction of the Financial Innovation and Technology for the 21st Century Act marks a significant milestone in the House Committees on Agriculture and Financial Services efforts to establish a much-needed regulatory framework that protects consumers and investors and fosters American leadership in the digital asset space.“
Thompson stated that he hoped the XRP decision would persuade more Democrats to back the effort.
Thursday’s bill was first drafted in June, and the law has undergone some changes since the draft. For example, it changed a previous rule concerning SEC or CFTC provisional registrations.
Crypto firms in the United States would be able to submit a notice of intent to register with the agency. They will not face enforcement proceedings in relation to registration or token listings. They must, however, follow the rules for protecting customer assets and disclosing information. Authorities will continue to pursue companies for deception or manipulation.
The bill is still a Republican initiative. It will need Democratic support in Congress, particularly in the Senate, to pass. Major lawmakers, including Maxine Waters, the senior Democrat on the Financial Services Committee, have expressed concern about the bill. The SEC has repeatedly stated that new regulations are not required to specify when a token falls under its jurisdiction. Many people, however, disagree.
