Republican lawmakers in the House of Representatives unveiled a preliminary bill on June 2nd that aims to provide clear guidelines for regulators in the rapidly evolving cryptocurrency industry.
One of the key objectives of the draft bill is to distinguish between the regulation of cryptocurrencies as securities and the regulation of cryptocurrencies as commodities. This would prevent the U.S. Securities and Exchange Commission (SEC) from treating payment stablecoins and digital commodities as securities, allowing for more flexible oversight.
Under the proposed rules, the SEC would no longer be able to deny exemptions to certain trading platforms solely based on their offering of digital assets. Activities such as providing wallets, publishing software, and operating nodes, considered as “ancillary activities,” would be exempt from SEC regulation. However, the SEC would still retain anti-fraud authority over certain crypto commodity transactions.
Conversely, the draft bill would grant the Commodity Futures Trading Commission (CFTC) new powers over digital commodity cash and spot markets. The CFTC would have authority over transactions involving payment stablecoins and digital commodities on registered platforms. However, the CFTC would not have control over the design and operation of these stablecoins.
To ensure compliance, the bill outlines requirements for digital commodity exchanges registering with the CFTC and establishes a process for determining eligible assets on these platforms. Additionally, the CFTC could set standards for digital asset custodians but would not directly regulate them.
To foster collaboration and coordination, the proposal suggests creating a joint advisory committee between the CFTC and SEC and establishing other regulatory groups and undertaking initiatives and studies.
The bill’s sponsor, Representative Patrick McHenry, views this draft as a significant step toward establishing clear regulatory guidelines. He emphasizes the importance of striking a balance between consumer protection and promoting responsible innovation in the cryptocurrency space.
The bill results from collaboration between the House Financial Services Committee, chaired by Representative McHenry, and the House Agriculture Committee, chaired by Representative Glenn Thompson. Representatives French Hill and Dusty Johnson also endorse the bill.
This legislative proposal addresses various regulatory debates in recent months, including expanding exchange rules to cover non-exchange services and evolving custodianship requirements. Furthermore, it aims to address the differing regulatory roles of the CFTC and SEC.
Although the bill is in its early stages, it has yet to receive feedback from Democratic lawmakers.
