- Key Republican members of the U.S. House of Representatives have introduced a comprehensive bill aimed at providing a regulatory framework for the crypto market.
- The bill outlines procedures for crypto firms to register with the SEC or the CFTC, with the latter gaining new powers to oversee certain token trading directly.
- The bill requires bipartisan support, particularly in the Senate, to be enacted during this Congressional term.
Key Republican members of the U.S. House of Representatives have unveiled a comprehensive bill for oversight of the crypto market. The bill, known as the “Financial Innovation and Technology for the 21st Century Act,” comes in the aftermath of a court ruling involving Ripple Labs Inc., which has galvanized the debate on cryptocurrency regulations.
The proposal was launched by prominent figures including House Agriculture Committee Chairman Glenn Thompson of Pennsylvania, and Republican Reps. French Hill and Dusty Johnson. The latter two are the chairpersons of the digital assets subcommittees in the House Financial Services and House Ag panels, respectively. Other supporters include Financial Services Chair Patrick McHenry of North Carolina.
Bill Seeks to Establish Clear Framework for Crypto Oversight
The ambitious legislation, which was initially drafted in June, seeks to clarify when and how crypto firms should register with the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC). The CFTC would gain new powers to directly oversee trading in specific tokens under the proposed framework. The bill also offers a path for digital assets that start as securities to be later regulated as commodities. The determining factor here would largely hinge on whether the affiliated blockchain network is sufficiently decentralized.
Furthermore, the bill would give crypto firms the ability to file a notice of intent to register with the agencies. Compliance with requirements around safeguarding customer assets and transparency would protect these firms from enforcement actions related to registration or token listings. However, the regulators will retain the power to target companies for fraudulent or manipulative activities.
New Rules to Protect Consumers and Foster Innovation
Notably, the bill includes provisions that would require crypto firms registered with the SEC to implement and enforce written policies to mitigate conflicts of interest with affiliates. It also calls for a joint study by the SEC and CFTC to determine whether additional guidance or rules are needed to facilitate the development of tokenized securities and derivatives products.
In a statement, Rep. Thompson highlighted that the legislation signifies a critical milestone in the efforts of the House Committees on Agriculture and Financial Services to establish a much-needed regulatory framework. This structure aims to protect consumers and investors while promoting American leadership in the digital asset space.
The Challenges Ahead: Bipartisan Support and Regulatory Clarity
The proposal, while comprehensive, is still primarily a Republican-led initiative. It requires support from the Democrats, particularly in the Senate, to be enacted in this Congressional term. Notably, significant figures such as Maxine Waters, the top Democrat on the Financial Services Committee, have expressed concerns about the bill.
The SEC, for its part, has repeatedly argued that new rules aren’t necessary to define when a token falls under its purview. However, Republicans assert that the recent Ripple ruling demonstrates the need for clearer legislation, and they hope to persuade Democrats to back their cause.
