On Wednesday, July 26, the US House panel approved the legislation by crypto advocates to set up clear regulatory rules in the country.
The House Financial Services Committee approved the Republican-led bill by a vote of 35 to 15, with some Democrats also voting in favor. North Carolina’s chairman, Patrick McHenry, praised both the legislation and the potential of cryptocurrencies. “This is a software revolution and a financial revolution if done correctly,” he stated.
The Republicans had warned that in the absence of a clear regulatory measure, all crypto companies would relocate overseas. After the XRP ruling, the Republicans introduced this historic crypto bill with a few modifications last week.
Passing the initial step is a victory for crypto supporters, who contend that current regulations lack clarity and are attempting to thwart U.S. Securities and Exchange Commission actions against the industry, particularly in the wake of the failures of prominent companies such as FTX.
Thursday will see the House Agriculture Committee, led by Pennsylvania Republican Glenn Thompson, examine its portion of the bill. This includes supplying the Commodity Futures Trading Commission with an additional $120 million. Consequently, the additional funding would grant the commission new regulatory authority over the asset class, in accordance with the legislation.
Crypto Regulatory Infrastructure
The proposed legislation seeks to establish registration requirements for crypto companies with the SEC or CFTC. In addition, it outlines a procedure for digital asset issuers to demonstrate to the SEC that their blockchain network is sufficiently decentralized, so that the CFTC can supervise tokens related to these assets as commodities.
In addition, the bill requires the two agencies to collaborate on rulemaking and mandates research on topics such as nonfungible tokens and decentralized finance (DeFi).
Furthermore, the law states that a digital asset should not be considered a security simply because it is sold in conjunction with an investment contract. This is consistent with a recent court decision in the SEC’s lawsuit against Ripple Labs Inc.
Republicans hope that this decision will aid their efforts to pass new laws and convince their Democratic colleagues of the necessity of such legislation.
This legislation has encountered opposition, including from SEC Chairman Gary Gensler. The SEC Chair stated that the existing regulations are sufficient to determine whether or not a token is a security. According to Gary Gensler, there is no need for new regulations. Several additional prominent Democrats have also criticized the bill.
