The new regulation is set to establish "a functional framework" and limit SEC's influence on the sector.
US lawmakers introduced a bill that could bring much-needed clarity to cryptocurrency regulation.
On June 2nd, two Republican members from the House Financial Services Committee and House Agriculture Committee unveiled a draft discussion.
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The lawmakers suggest a novel regulatory pathway for certain digital assets, potentially categorizing them as "digital commodities." The proposed framework would set clear rules for crypto businesses in the US.
It is worth noting that the bill takes aim at the US Securities and Exchange Commission (SEC), prohibiting the agency from denying digital asset trading platforms the right to register as regulated alternative trading systems. This could allow such platforms to trade "digital commodities and payment stablecoins."
The lawmakers seem to address criticism the SEC has received for its lack of clear guidelines. The bill would pave the way for certain digital assets to qualify as digital commodities as long as they're "functional and considered decentralized."
The proposed legislation also obliges the SEC to provide a "detailed analysis" for any objection to a firm's decentralization claim. The draft further stated:
The Act also requires the SEC to modify its rules to allow broker-dealers to custody digital assets, if they meet certain requirements. Additionally, the Act would require the SEC to write rules to modernize certain regulations for digital assets.
The draft bill was welcomed by Paul Grewal, Chief Legal Officer of Coinbase, who acknowledged it as a strong regulatory foundation. However, he urged for a thorough review before it was formally introduced.
A leading US-based crypto exchange Coinbase has been fighting with US SEC for quite some time, urging the agency to provide clear regulations for the crypto industry. However, SEC along with its chair Gary Gensler stated that proper regulations are already in place.
The legislation represents a significant stride towards greater regulatory clarity in the US crypto industry. It underlines a promising shift in lawmakers' perspective, recognizing the potential of digital assets.
