- A new bill, named “Eliminate Barriers to Innovation Bill 2021”, has been introduced in Congress
- The Bill aims to categorize cryptocurrencies and clarify the phenomenon’sphenomenon’s government regulations
- A working group consisting of a diverse membership will be formed and will be called upon to advise lawmakers on the future course of action
Digital assets, particularly cryptocurrencies, exhibit dual natures. They are viewed by some as a non-liquid “store-of-value” asset, whereas others argue that it should be classified as a commodity. The resulting confusion in its categorization has thrown up several roadblocks to a legal basis for its regulation.
Security or a commodity?
Since it is not clearly defined or categorized, crypto entities in several countries operate within unclear legal frameworks or a complete legal void. Russia is perhaps the only country that clearly classifies cryptocurrencies as a commodity. The US government is still divided on this issue. Securities come under the SEC’s jurisdiction, whereas commodities are the CFTC’s responsibility.
The SEC had taken the lead to enforce regulations with its Commissioner, Hester Pierce, proposing an incubation period of three years for legitimate crypto projects to evolve. Since that announcement in 2020, the SEC’s directives have provided much guidance for both crypto firms and the government.
New Bill introduced
The new bill, named “Eliminate Barriers to Innovation,” seeks to change the current scenario and improve the current protocol regime. Introduced by Patrick McHenry and Stephen Lynch, it aims to institute a committee to analyze the current regulations and provide suggestions for improvement.
The working group will likely include representatives from the SEC and the CFTC and non-governmental agents from a pool of FinTech companies, businesses operating in the crypto realm, investor protection groups, and supporters of investments in underserved firms. The group will also have at least one academic scholar who is well-versed with blockchain technology.
After their analysis, the committee will be required to draft and submit a report detailing the current regulations and their impact on the US markets. The committee will also look into custody, security, and private key management issues and provide methods to prevent fraud and protect investor sentiments in the crypto realm. Moreover, it will also detail suggestions for fairness, integrity, and transparency of digital asset markets.
The Freedom Caucus’s actions prevented the bill from being passed by voice vote in the Senate. However, the chief policy officer at the Chamber of Digital Commerce was optimistic and said that this bill would provide grounds for the SEC and the CFTC to work together and resolve legal issues.
We are sorry that this post was not useful for you!
Let us improve this post!
Tell us how we can improve this post?