Republican members of the Agriculture and Financial Services Committees in the United States House have collaboratively introduced a 212-page bill known as the Financial Innovation and Technology for the 21st Century Act. This bill aims to establish a comprehensive framework for digital assets, filling in the existing regulatory gaps and addressing the unique risks associated with various digital asset-related activities.
Under this bill, the Commodity Futures Trading Commission would be granted jurisdiction over digital commodities, while the jurisdiction of the Securities and Exchange Commission would be clarified. Besides, a process would be created to enable digital assets initially classified as securities to be sold as commodities.
The bill sets specific conditions to qualify as a digital asset commodity, with decentralization being a primary requirement. Such digital asset commodities would be eligible for sale on digital asset trading systems registered with the SEC. Market participants engaging in these activities would be subject to enhanced disclosure requirements and potentially required to register with both regulatory agencies.
🚨Introducing the Financial Innovation and Technology for the 21st Century Act. This bill establishes a regulatory framework for digital assets, protects consumers, fosters innovation, and positions America as a leader in finance and technology. #crypto https://t.co/0ihzY3MP0k
— House Committee on Agriculture (@HouseAgGOP) July 20, 2023
The bill also emphasises the importance of international cooperation and harmonisation of regulatory standards. The involved agencies would be mandated to collaborate with foreign regulators to establish consistent rules for digital asset oversight. Furthermore, the Government Accountability Office would look into NFTs and their integration into traditional marketplaces.
Reps. French Hill and Dusty Johnson, along with Glenn Thompson, Tom Emmer, and Warren Davidson, are cosponsors of the bill. Before its introduction, they expressed their concerns about the Securities and Exchange Commission’s approach to regulating the crypto industry, referring to it as “regulation by enforcement” in a letter to SEC Chair Gary Gensler.
The bill’s introductory materials highlighted the inadequacy of the current regulatory regime to accommodate digital assets, emphasizing the need for greater clarity and certainty for entities operating in this space.
In addition to this bill is a competing version known as the Responsible Financial Innovation Act, introduced by Sens. Cynthia Lummis and Kirsten Gillibrand. Both bills represent efforts to provide a structured and comprehensive regulatory framework for the evolving digital asset landscape.