The top Republicans in the House of Representatives formally introduced A.J invoice which seeks to change how crypto markets operate in the United States. Republican members of the US House of Representatives Agriculture and Financial Services Committees introduced this bill to create a regulatory framework for digital assets.
Introduced on July 20, the Financial Innovation and Technology for the 21st Century Act represents an effort by US lawmakers to strengthen cooperation between two major federal regulators. These include the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).
The 212-page bill aims to address regulatory loopholes by creating a comprehensive framework. The framework is expected to address the specific risks associated with various activities related to digital assets.
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Crypto Regulatory Framework: Protecting Consumers and Fostering Innovation
The bill was co-sponsored by Glenn Thompson, chair of the House Committee on Agriculture, and French Hill, chair of the Digital Assets Subcommittee. It is primarily intended to protect consumers and promote innovation within the United States.
In addition to the goals of protecting consumers and promoting innovation, the bill also establishes criteria for classifying a digital asset as a commodity. The primary focus lies on decentralization.
If a digital asset meets these conditions, it becomes eligible to be traded as a digital asset commodity on digital asset trading systems registered with the SEC. As part of this regulatory framework, market participants will be required to adhere to enhanced and comprehensive disclosure standards.
Furthermore, such participants may need to register with each of the relevant regulatory agencies for compliance purposes. The bill specifically outlines a streamlined process for crypto companies to register with two major financial regulators, the CFTC and the SEC.
The bill also seeks to modernize and update outdated US securities laws when it comes to crypto. One of the important amendments proposed in the bill is to require the SEC to consider the “innovation” aspect as it is necessary to consider innovation when making regulatory decisions or taking any enforcement actions.
The text of the bill states:
Securities laws and regulations do not take into account many of the unique characteristics of digital assets.
Focus on integrating NFTs into traditional markets
Under the provisions of the Cryptocurrency Regulatory Act, both the CFTC and the Securities and Exchange Commission (SEC) will be obligated to cooperate with foreign regulators.
The goal is to establish uniform and consistent regulatory standards for digital assets and related activities across international jurisdictions.
This cooperation aims to reduce organizational contradictions. It also focuses on strengthening global cooperation and creating a more coherent approach to managing the digital asset space.
Additionally, the bill mandates the Government Accountability Office (GAO) to conduct a comprehensive study on non-fungible tokens (NFTs). GAO also urges the integration of NFTs into traditional markets.
This study will delve into different aspects of NFTs. This includes a study of its performance, impact on markets, potential risks and potential impacts on consumers and investors.
This is not the only encryption bill proposed by US lawmakers. Last week, Sens. Cynthia Loomis and Kirsten Gillibrand introduced a new bipartisan version of the Responsible Financial Innovation Act, which will now compete with the cryptocurrency regulation bill.
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