The United States’ House Financial Services Committee passed two crucial bills that could pave the way for regulatory clarity. In a 35-15 vote, the Financial Services Committee of the U.S. Congress approved, with bipartisan support, the Financial Innovation and Technology for the 21st Century Act which would “establish clear principles to ensure financial security and certainty as digital asset developers continue to innovate.” Introduced sometime in July 2020, the bill crucially sets definitions on whether a digital asset is a security or a commodity and whether a cryptocurrency firm would have to register under the Commodities Futures Trading Commission (CFTC) or under the Securities and Exchange Commission (SEC). The bill also crucially sets a process for assets previously labeled as securities to be re-labeled as commodities. Another bill that was passed by the committee was the Blockchain Regulatory Certainty Act, a bipartisan bill authored by Rep. Tom Emmer and Rep. Darren Soto. The bill aims to remove unnecessary regulation for blockchain developers and service providers. In a tweet thread celebrating the bill’s passage, Emmer said that “the BRCA provides the digital asset ecosystem regulatory certainty to keep innovating in the United States so the future digital economy reflects American values.” Together, the two bills could pave the way for regulatory clarity in terms of distinguishing between commodities and securities. They will also define strict jurisdictions for regulatory agencies. As one might recall, the Gary Gensler-led SEC has been particularly zealous and high-strung with regards to digital assets, claiming that all digital assets are securities and therefore fall under the agency’s control. Its regulation-by-enforcement approach has been detrimental for investors and the growth of the cryptocurrency industry. However, the passage of the two bills is but the first step in this apparently uphill battle. The cryptocurrency community should still keep a watchful eye on how the subsequent proceedings will unfold. Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
