In advance of today’s hearing, the House Financial Services Committee and the Committee on Agriculture have distributed draft legislation that seeks to outline the regulatory environment for digital assets.
The draft legislation is extensive, currently sitting at 212 pages.
An 8-page section-by-section description is viewable here.
Iterations of this bill have been circulating for some time. Part of the challenge is determining when a digital asset is a security, a commodity, a currency, or something else.
During the Biden Administration, elected and appointed officials ignored the opportunity of digital assets, attempting to undermine the technologies development. The former Chairman of the SEC, Gary Gensler, dodged his agency’s responsibilities by pursuing a regulation by enforcement approach.
The Trump administration has embraced digital asset innovation and as both sides of Congress are controlled by Republicans it is expected that legislation providing guidelines for the digital asset ecosystem will be signed into law this year.
The two Committees state:
“This technology can modernize our financial infrastructure, reinforce the dollar’s leadership in global markets, and support new collaborative models for delivering services, including access to financial products, social networks, and distributed computing systems.”
The policymakers are looking to close current regulatory gaps, improve transparency, protect consumers while enabling digital asset innovation.
In brief, the goal is to:
- Protect consumers by strengthening transparency and accountability:
- Digital asset developers will be required to provide accurate, relevant disclosures, including information relating to each digital asset project’s operation, ownership, and structure.
- Strengthen the market by protecting digital asset projects:
- Digital asset developers will have a pathway to raise funds under the SEC’s jurisdiction.
- Market participants will have a clear process to register with the CFTC for digital commodity trading.
- Provide clarity to customer-facing digital asset institutions by:
- Establishing clear lines between the SEC and CFTC; and
- Creating comprehensive registration regimes to permit them to lawfully serve customers in digital asset markets.
House Financial Services Committee Chairman French Hill said they have made progress in the 118th Congress to build bipartisan, bicameral consensus in crafting a regulatory framework for digital assets.
“Our discussion draft builds upon that work and provides much-needed regulatory clarity for the digital asset ecosystem by protecting consumers and safeguarding the long-term integrity of digital asset markets in the United States. I look forward to receiving feedback from the public and working alongside the Trump Administration and my House and Senate colleagues to deliver a clear, durable framework to President Trump’s desk so that America remains the crypto capital of the world.”
Agriculture Chairman G.T. Thompson said that regulatory clarity is long overdue, calling today’s hearing the “first step in advancing a comprehensive framework that protects consumers, fosters innovation, and closes regulatory gaps in oversight.”