House Republicans have unveiled legislation that addresses the role of regulators such as the SEC in the crypto industry, aiming to maintain the balance between consumer protection and encouraging responsible innovation
The bill, drafted by Reps. Patrick McHenry of North Carolina and Glenn Thompson of Pennsylvania, assigns the explicit spot market authority over crypto commodities to Commodity Futures Trading Commission (CFTC). At the same time, the Securities and Exchange Commission (SEC) would remain responsible for regulating digital asset securities.
The draft legislation argues that the current crypto regulation guidelines not only stifle innovation but also fail to protect consumers who are willing to invest in innovative financial instruments such as crypto. Therefore, the bill aims to bar the SEC from preventing the listing of crypto securities. Furthermore, the proposed legislation requires the commission to modify its rules and allow broker-dealers to custody digital assets.
Seeking a healthy balance between customer protection and financial innovations, McHenry, House Financial Services Committee chair, encouraged “stakeholders and market participants to provide constructive feedback to help us improve our legislation.”
Based on feedback, the draft bill will likely be modified over the coming weeks and months. Some suggestions may come from the hearing on digital asset regulation scheduled by the House Agriculture Committee on June 6, where the new bill may probably become a hot topic for discussion.
In the US, cryptocurrency companies such as Coinbase have been long asking the SEC for more regulatory clarity. The country’s approach to the crypto industry has even motivated the firm to open an offshore division.
Nevertheless, the crypto exchange didn’t give up on the huge US customer base. Instead, Coinbase started lobbying crypto with “Moving America Forward” Campaign in wait for clearer regulations and a favourable environment.
Meanwhile, other global regions are starting to address the licensing and functioning of the crypto service providers with enhanced regulations.
For instance, the countries of the EU are implementing MiCA crypto rules and Transfer of Funds Crypto Regulation. Meanwhile, Dubai released Crypto Regulations for Virtual Asset Services Providers and Hong Kong securities regulator started accepting license applications from crypto exchanges according to the new rules.
At the same time, the Bahamas have recently offered a new set of regulations for cryptocurrency – the DARE Bill for public consideration.