On July 20, Republican members of the United States House Agriculture and Financial Services Committees jointly introduced a pioneering bill. This bill is aimed at creating a robust regulatory framework for digital assets.
Also, this comes after months of collaborative efforts by both committees. The 212-page bill, named the Financial Innovation and Technology for the 21st Century Act, aims to rival the Responsible Financial Innovation Act presented by Lummis and Gillibrand.
The Act has been meticulously crafted to address the specific risks associated with various digital asset-related activities, according to the explainer. One of its main provisions grants the Commodity Futures Trading Commission jurisdiction over digital commodities.
Additionally, the bill clarifies the jurisdiction of the SEC and devises a process for digital assets initially considered securities to be sold as commodities.
Digital Asset Commodities and Fostering International Regulatory Cooperation
The bill establishes a clear set of conditions for a digital asset to be recognized as a commodity, with a crucial requirement being decentralization. In this regulatory environment, digital asset commodities could be traded on SEC-registered digital asset trading platforms.
Moreover, market participants would be subject to more comprehensive disclosure requirements. Also, they could potentially have dual registration with both regulatory agencies.
Recognizing the global nature of digital assets, the bill mandates the relevant agencies to collaborate with foreign regulators in establishing consistent regulatory standards.
Additionally, the Government Accountability Office would conduct a comprehensive study on nonfungible tokens (NFTs) and their integration into traditional marketplaces. This is to promote a deeper understanding of emerging trends.
A Letter to the SEC Chair Criticizing Regulation by Enforcement
Prior to the bill, Representatives French Hill and Dusty Johnson, who are among its cosponsors, wrote a letter to SEC Chair Gary Gensler. The letter expressed concerns over the agency’s “regulation by enforcement” approach in the crypto industry. It also highlighted the need for clarity to enable smooth operations for relevant entities.
Collaborative Efforts and Competition with the Responsible Financial Innovation Act
Apart from Representatives Hill and Johnson, the bill’s other cosponsors include Glenn Thompson, Tom Emmer, and Warren Davidson. The collaboration between the House Agriculture and Financial Services Committees commenced earlier this year. This was after multiple joint meetings held to prepare for this crucial legislation.
Interestingly, just last week, Senators Lummis and Gillibrand introduced a revised version of their Bipartisan Responsible Financial Innovation Act. This further set the stage for competition with the Financial Innovation and Technology for the 21st Century Act.
This comprehensive bill reflects the members’ commitment to fostering innovation and accountability in the fast-evolving digital asset space. Notably, it was forged through joint efforts and designed to fill regulatory gaps and establish clear guidelines for digital assets.