As of 2022, there are at least 50 digital assets supposedly presented to Congress, aiming to govern everything from stablecoins to the jurisdiction of United States regulators.
However, at least four of them are seen as potentially having a big impact on the industry (if approved) – given the attention of both lawmakers and the crypto industry.
Financial Innovation and Technology for the 21st Century Act
This account introduced on July 20it aims to create a robust process for determining whether a digital asset is a commodity or a security and would clarify the jurisdictions of regulators.
A bill introduced by Republican members of the House Agriculture and Financial Services Committee would give the Commodity Futures Trading Commission (CFTC) power over digital commodities and clarify the jurisdiction of the Securities and Exchange Commission (SEC).
Introducing the Financial Innovation and Technology for the 21st Century Act. This bill creates a regulatory framework for digital assets, protects consumers, encourages innovation, and positions America as a leader in finance and technology. #crypto https://t.co/0ihzY3MP0k
— House Agriculture Committee (@HouseAgGOP) July 20, 2023
Process for crypto assets that were marked securities would also get a path to relabeling commodities – which there might be projects revived after being effectively shut down due to past legal decisions.
Responsible Financial Innovation Act (RFIA)
A bill with similar aims – known as Lummis-Gillibrand account or RFIA — aims to clarify the role of the SEC and CFTC in regulating cryptocurrencies. It also aims to provide greater consumer protection by providing laws “to prevent further FTX-style events,” according to the bill overview.
The crypto asset industry is here to stay.
Today, @SenGillibrand and I’m reintroducing landmark legislation to create a federal regulatory framework that allows crypto businesses and investors to thrive here in America while protecting consumers from bad actors. pic.twitter.com/z2pr0evWt2
— Senator Cynthia Lummis (@SenLummis) July 12, 2023
Also included is a clear tax treatment of digital assets, and the Federal Reserve would be ordered to process bank applications for major accounts from crypto firms “on an equitable basis.”
Also, depository institutions would be the only ones that could issue stablecoins, would make room for Decentralized Autonomous Organizations (DAOs) in the Tax Code and mandate an advisory committee along with a number of regular industry reports.
Digital Asset Market Structure (DAMS) Bill
DAMS, introduced on June 1, is another bill in order to define SEC and CFTC tasks related to cryptocurrencies and set a framework for regulators to decide whether certain cryptocurrencies are securities or commodities.
The bill is getting some attention, June 26 Rep. Maxine Waters sent letters Treasury Secretary Janet Yellen and SEC Chairman Gary Gensler, who asked them to consider the bill.
#RELEASE: Ranking member @RepMaxineWaters He keeps calling @USTreasury, @SECGov share an analysis of the Republican Digital Asset Market Structure Act | https://t.co/lloLm7Lho6 pic.twitter.com/qbPNMSRl5v
— House Financial Services Committee (@FSCDems) June 26, 2023
Under the proposed law, a certain crypto-token would have to undergo certification with the SEC to prove that it is sufficiently decentralized before it can gain commodity status.
Crypto exchanges could register with the SEC as an alternative trading system (ATS), and the regulator could not deny registration because of a platform trading digital assets.
The crypto firm Prometheum is an SEC-registered ATS and may offer trading, clearing, settlement and custody of digital assets, although it is currently unclear what assets the SEC allows.
DAMS would clarify ATS rules and allow trading of digital commodities and stablecoins on ATS platforms and the SEC would have to allow broker-dealers to hold cryptocurrencies if they meet the requirements.
Digital Commodity Exchange Act (DCEA)
First introduced in September 2020, updated version of DCEA was last reintroduced in April 2022, he added that stablecoin providers could register as a “Fixed Value Digital Commodity Operator”, including recording and reporting requirements.
The DCEA gives the CFTC authority to register and regulate spot exchanges subject to the same rules as other commodity exchanges.
1/ We are proud to support the reintroduction of the Digital Commodity Exchange Act (DCEA). There is a growing consensus in Washington that federal oversight of spot markets for digital assets is needed, and we believe the DCEA represents a smart framework… https://t.co/U0RMMOKBe9
— Blockchain Association (@BlockchainAssn) April 28, 2022
Cryptocurrencies, which are not considered securities, are designated as digital commodities under the CFTC’s purview, and the SEC would police offerings of crypto securities.
Developers of crypto projects could also voluntarily register with the CFTC in order to submit information required to publicly trade and list their assets on an exchange.
Other accounts
Many more cryptocurrencies are floating through Congress with varying degrees of success. Stablecoin regulatory proposals passed Stablecoin TRUST Act and Stablecoin Innovation and Protection Act.
Related: Congress may be ‘unruly’, but the US could see crypto legislation in 2023
A law descriptively titled the Crypto Consumer Investor Protection Act and the Crypto Exchange Disclosure Act were introduced in December 2022 but I haven’t seen much movement since then.
The Digital Asset Anti-Money Laundering Act was also introduced in December, Senators Elizabeth Warren and Roger Marshall would regulate crypto ATMs and ban financial firms from using crypto mixers. Warren promised its reinstatement in February, but this event is yet to take place.
Opinion: GOP crypto max is almost as bad as Dems’ ‘anti-crypto army’