A new digital assets oversight measure introduced by U.S. House Republicans aims to establish a regulatory framework to protect investors in the cryptocurrency industry. The House Committees on Agriculture and Financial Services’ attempts to address the lack of regulatory certainty in the digital asset market have reached a key turning point with the introduction of the Financial Innovation and Technology for the 21st Century Act, proposed legislation.
Rep. Glenn “GT” Thompson (R-Pa.), chairman of the House Committee on Agriculture, underlined the need of building a thorough regulatory framework to safeguard consumers and investors while supporting American leadership in the quickly developing digital asset business.
In response to the increased need for regulatory direction in the face of zealous enforcement actions and confusion surrounding the industry, many bills have been filed in recent years that aim to create clear standards for digital assets. The apparent lack of clarity has made existing crypto firms think about leaving the United States while also discouraging newcomers from setting up shop there.
The goal of the new legislation, which was first prepared in early June, is to make it easier for crypto exchanges to register with the SEC. These exchanges would be given permission to trade digital securities, commodities, and stablecoins on a single platform if they did this. With a comprehensive grasp of the legal environment, the law aims to provide innovators in the cryptocurrency business clarity and assurance so they may innovate.
However, a substantial alteration from the original text that would possibly bring uncertainty into the measure was pointed out by Gabriel Shapiro, general counsel of Delphi Labs. The new bill’s page 10 specifically states that a variety of conventional securities, including stocks, bonds, and “transferable shares,” are not considered to be “digital assets.” This exclusion may unintentionally increase regulation of certain assets in the decentralized finance (DeFi) market, even though they are not presently subject to it.
Shapiro expressed worry that, notwithstanding the exception, the SEC would still take enforcement action against assets in the DeFi market if they qualify as “transferable shares” or “profit interests.” The bill’s purported goal of giving the cryptocurrency sector legal consistency and clarity may be undermined by this uncertainty.
The measure will be extensively examined and discussed as it moves forward in order to strike a balance between encouraging innovation and maintaining investor protection in the constantly changing world of digital assets. The development of the cryptocurrency business in the United States is expected to be significantly influenced by the coordinated efforts to create a regulatory framework.