In a major step towards providing regulatory clarity for the cryptocurrency industry, a bipartisan bill aimed at addressing the regulation of digital tokens has successfully passed the House Financial Services Committee with a favorable 35-15 vote.
Known as the Financial Innovation and Technology for the 21st Century Act, the bill seeks to establish a regulatory framework for cryptocurrencies, defining when a cryptocurrency should be classified as a security or a commodity.
The bill’s primary objective is to determine the appropriate federal agency for oversight based on whether a cryptocurrency is deemed a security or a commodity. Securities would fall under the jurisdiction of the Securities and Exchange Commission (SEC), while commodities would be regulated by the Commodity Futures Trading Commission (CFTC).
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Furthermore, the bill proposes the introduction of a certification process that allows firms to demonstrate to the SEC the adequate decentralization of their projects. This certification would enable these firms to register their digital assets as digital commodities with the CFTC. By providing such clarity on token regulation, the bill aims to mitigate uncertainty and foster innovation within the industry.
The passage of the bill by the House Financial Services Committee is being seen as a significant victory for the crypto industry. For a long time, the industry has sought clear regulatory guidelines, and the broad approach taken by the SEC has resulted in ambiguity for businesses. With the bill’s progress, the industry is now one step closer to obtaining the much-needed regulatory clarity it has been advocating for.
While praised as a positive development, the bill has not been without its critics. Some have expressed concerns over the concentration of power within the CFTC, while others argue that the bill doesn’t provide comprehensive clarity on the regulation of tokens. These opposing viewpoints are expected to shape discussions and potential amendments as the bill progresses through the legislative process.
#WATCH: Chairman @PatrickMcHenry delivers opening remarks at today's historic markup of comprehensive digital asset market structure legislation.
Read more 🔗https://t.co/7IyEcft8b1
📺 Watch his opening remarks 👇 pic.twitter.com/LHr3StwOXL
— Financial Services GOP (@FinancialCmte) July 26, 2023
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The Next Phase
The next phase of the bill involves deliberation and consideration by the full House of Representatives. If it receives approval there, it will then proceed to the Senate for further assessment and evaluation.
Democratic representatives Jim Himes and Ritchie Torres were among those who joined committee Republicans in voting for the bill, showcasing a bipartisan effort to support the regulation of digital assets. Moving forward, the House Agriculture Committee is scheduled to consider the same bill on Thursday.
Representative Patrick McHenry, the Republican Chair of the House Financial Services Committee, expressed the need for the United States to catch up with other jurisdictions in regulating digital assets.
He stated, “As other jurisdictions like the UK, Singapore, and Australia have moved forward with clear regulatory frameworks for digital assets, the United States is at risk of falling behind. We intend to change that today.” This sentiment emphasizes the urgency to provide regulatory clarity and ensure the United States remains competitive in the crypto industry.
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The recent vote in the House Financial Services Committee marks a historic moment for the crypto industry. It is the first time a crypto regulatory bill has been put to a vote in Congress, a testament to the efforts of crypto lobbyists who have been advocating for regulatory clarity for years.
Kristin Smith, CEO of the Blockchain Association, stated, “Obviously, we’ve had some important decisions come from the courts in the past, but this is by far the most significant legislative moment that we’ve had.”
The bill’s progress has energized many within the crypto industry, who believe that with the support of Democrats, the bill could have a real chance of success in the Senate. As the regulatory landscape begins to take shape, stakeholders eagerly await further developments that will guide the industry and fuel its growth.
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