US Lawmakers Present Bill to Simplify Cryptocurrency Regulations and Reduce SEC’s Control

The upcoming bill introduces a framework that categorizes certain tokens as digital commodities, given that they are decentralized. Additionally, it aims to address the SEC’s previous approach to cryptocurrencies.

Proposed Bill for Clear Crypto Regulations and Digital Commodity Labeling

Members of the House Financial Services Committee and House Agriculture Committee have jointly presented a preliminary draft. The draft introduces a potential pathway for recognizing and labeling crypto assets as digital commodities.

U.S. lawmakers released a draft proposal on June 2 to create a clear regulatory framework for cryptocurrency companies. The proposed bill would prevent the U.S. Securities and Exchange Commission (SEC) from rejecting digital asset trading platforms seeking registration as regulated alternative trading systems. It would also enable these platforms to offer “digital commodities and payment stablecoins.”

The new legislation addresses a common concern in the crypto community about the SEC’s unclear guidelines. It allows certain digital assets to be recognized as digital commodities if they’re decentralized and functional. Moreover, the proposed bill requires the SEC to explain any objections it may have to a company’s decentralized status.

“The Act also requires the SEC to modify its rules to allow broker-dealers to custody digital assets, if they meet certain requirements,” said the draft. “Additionally, the Act would require the SEC to write rules to modernize certain regulations for digital assets.”

Draft Bill Introduced by Republicans, Lacks Input from Opposing Party

The founder and CEO of Coinbase, Paul Grewal, praised the draft bill, saying it “lays a strong foundation for regulatory jurisdiction and definitions.” However, he emphasized the need for a thorough review before formally introducing it. Cryptocurrency exchange Coinbase recently launched an ad campaign promoting crypto adoption.  They are also planning a lobbying-focused event in Washington, D.C., scheduled for July.

Patrick McHenry, Chair of the House Financial Services Committee, and Glenn Thompson, Chair of the House Agriculture Committee, both Republicans, introduced the bill. Despite this, lawmakers from the other party didn’t contribute to the draft. Historically, Democrats and Republicans have worked together on crypto regulation, but it’s hard to tell how far this proposal will go in a partisan Congress.

U.S. House and Senate lawmakers have approved a bill to prevent the government from defaulting on its debts by raising the debt ceiling. President Joe Biden is anticipated to sign the bill into law on June 2.

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