coinspress.com
Republican US House of Representatives leaders have unveiled a preliminary version of a bill that seeks to redefine cryptocurrencies as commodities.
Known as the Digital Asset Market Structure Proposal, the legislation was jointly introduced by Patrick McHenry, Chairman of the House Financial Services Committee, and Glenn “GT” Thompson, Chairman of the House Committee on Agriculture.
The proposed bill aims to address regulatory challenges in the crypto industry while fostering innovation and safeguarding American crypto consumers.
McHenry emphasized the importance of balancing consumer protection and promoting responsible innovation, urging stakeholders and market participants to offer constructive feedback to enhance the legislation.
Thompson echoed McHenry’s sentiments, emphasizing that the bill aims to bridge existing regulatory gaps between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), bolstering the United States’ financial and technological innovation position.
Prominent House members, including French Hill, Chairman of the Subcommittee on Digital Assets, Financial Technology, and Inclusion, and Dusty Johnson, Chairman of the Subcommittee on Commodity Markets, Digital Assets, and Rural Development, also expressed support for the bill.
Hill noted that the legislation would extend existing consumer and investor protections to digital asset-related activities and intermediaries under the principle of “same risk, same regulation.”
The bill’s key features include the potential resolution of the security versus commodity debate. It requires crypto firms to demonstrate that their tokens are commodities with adequate decentralization, ensuring no single entity has control exceeding 20%.
Furthermore, the bill suggests assigning regulatory oversight of Digital Commodities Exchanges to the CFTC instead of the SEC, thereby subjecting crypto companies to increased oversight from the CFTC.
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The proposed legislation also addresses regulations surrounding decentralized finance and other emerging areas of the crypto economy. It covers custodianship requirements, grants anti-fraud authority to the SEC, and encourages collaborative advisory efforts between the SEC and CFTC.
The crypto community has rallied behind the bill, with various stakeholders expressing support. Paul Grewal, Chief Legal Officer of Coinbase, described the legislation as a positive step, appreciating its definition of securities and commodities.
Today’s market regulation bill from @PatrickMcHenry and @CongressmanGT lays a strong foundation for regulatory jurisdiction and definitions, BD rules, and consumer protections. I’m eager to share more on this next Tuesday before the @houseaggop. 1/3 https://t.co/g9qceFwmcS
— paulgrewal.eth (@iampaulgrewal) June 2, 2023
Tyler Winklevoss, the co-founder of Gemini, also welcomed the bill, emphasizing the necessity of providing clear regulatory guidance to foster responsible innovation within the US crypto industry.
Multiple commentators highlighted the bill’s ability to clarify critical aspects such as jurisdiction, registration, and stablecoins.