 | Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day's top stories directly to your inbox. Sign up here! |
(Kitco News) - The U.S. House Financial Services Committee approved a pair of crypto-related bills on Wednesday, setting the stage for a full vote in the House that could finally deliver some regulatory clarity for the country’s blockchain industry.
A majority of lawmakers on the Committee voted in favor of the Financial Innovation and Technology for the 21st Century Act (FIT for the 21st Century Act) and the Blockchain Regulatory Certainty Act in legislative sessions on Wednesday.
The Financial Innovation and Technology for the 21st Century Act was introduced by Republicans on July 20. It was crafted to establish rules that outline when a crypto firm would need to register with the Commodity Futures Trading Commission (CFTC) or the Securities and Exchange Commission (SEC), depending on the services offered.
The main goal of the bill is to provide a concrete process for determining if a digital asset is a commodity or security, and to provide clarity on which regulator has jurisdiction.
The bill lays out a process that would allow crypto assets that have been labeled securities to be re-labeled as commodities and includes a description of the steps firms need to take to certify with the SEC that their projects are adequately decentralized, allowing them to register digital assets as commodities with the CFTC.
“We have crafted landmark legislation that establishes robust consumer protections and clear rules of the road for market participants while keeping innovation in the United States,” said French Hill (R-AR), Chair of the House Financial Services Committee. “I am proud that it has cleared its first hurdle today, passing out of committee with bipartisan support.”
The Blockchain Regulatory Certainty Act, which was reintroduced in August by co-sponsors Tom Emmer (R-MN) and Darren Soto (D-FL), was created to establish guidelines that promote blockchain innovation in the U.S. and remove barriers to development.
Emmer called the approval by the Committee “a huge win for the United States as we are one step closer to putting Americans in the driver’s seat in crafting the future peer-to-peer digital economy.”
“This agreed-upon guidance clarifies that non-custodial blockchain developers and service providers (miners, validators, wallet providers) that never custody consumer funds do not have to register as money transmitters,” he said. “After all, money transmission licensing laws are designed to protect consumers from the risk of loss of assets… a risk that occurs when transmitters and other intermediaries take control of consumer funds. Guidance, however, is not as concrete as [a] statute. Statute gives certainty. Guidance can change at the political whim of a new administration.”
If passed in the House of Representatives, the bill “will clear things up by affirming to the blockchain community that if you don’t custody customer funds, you are not a money transmitter,” Emmer concluded.
The House Agriculture Committee reviewed the FIT for the 21st Century Act on Thursday and ultimately approved it after several amendments were added by members of the Committee.
After approval by the Committees, the bills will advance to a full vote in the House of Representatives. If approved by the House, it will then advance to the Senate, where it will be debated, revised, and voted on.
|
| U.S. lawmakers and crypto firms push back against SEC ‘regulation by enforcement' |
While the House Financial Services Committee approved the two bills, a third bill under review, the Digital Assets Market Structure bill, was derided by members on both sides of the aisle and ultimately rejected.
The main area of concern was a clause in the bill that would allocate more power to the Commodity Futures Trading Commission (CFTC). Committee members also expressed concerns about whether the bill would weaken consumer protections enshrined by decades-old U.S. securities laws and ultimately leave American investors with fewer protections against fraud.
“I’ve been on this committee for 20 years and I can say unequivocally that this is the worst piece of legislation that has been presented for markup in that 20 years,” Rep. Stephen Lynch (D-MA) told the committee.
Representative Maxine Waters (D-CA) also pushed back against the bill, saying it paid too much attention to the pleas of the crypto industry while ignoring regulatory guidance from the SEC.
“As I have said before, we don’t need to invent new regulatory structures simply because crypto companies refuse to follow rules of the road,” Waters said. “Our securities laws have protected investors and retirees for 90 years while supporting capital formation and facilitating innovation.”
It remains to be seen whether any of the bills currently making their way through the legislative process will ultimately receive enough bipartisan support to advance to President Biden’s desk to be signed into law.
