Republican members of the US House of Representatives Agriculture and Financial Services Committee have collaboratively introduced a 212-page bill named the Financial Innovation and Technology for the 21st Century Act, aiming to establish a regulatory framework for digital assets. The bill , unveiled on July 20, seeks to address regulatory gaps by providing a framework tailored to address the specific risks associated with various digital asset-related activities.
Under the proposed legislation, the Commodity Futures Trading Commission (CFTC) will gain jurisdiction over digital commodities, while the Securities and Exchange Commission's (SEC) jurisdiction will be clarified. The bill also outlines a process that allows digital assets, which might otherwise be classified as securities, to be treated and sold as commodities.
For a digital asset to be considered a commodity, the key requirement will be decentralization. Such assets can then be traded on digital asset trading systems registered with the SEC. Market participants will be subject to more comprehensive disclosure requirements and can choose to register with Both the CFTC and the SEC. The bill further mandates that these regulatory agencies cooperate with foreign regulators to establish consistent global standards.
In addition to addressing digital asset commodities, the bill instructs the Government Accountability Office to conduct a study on non-fungible tokens (NFTs) and their integration into traditional markets.
Prior to the bill's introduction, Representatives French Hill and Dusty Johnson sent a letter to SEC Chairman Gary Gensler, expressing criticism of the agency's approach to "mandatory regulation" of the crypto industry. This sentiment was echoed in the presentation materials of the bill, stat ing that the SEC's current regulatory framework lacks clarity and fails to accommodate the unique needs of entities operating in the digital asset space.
The bill's co-sponsors include Glenn Thompson, Tom Emmer, and Warren Davidson. This legislative initiative comes after months of joint work between the Agriculture and Financial Services Committee, aiming to provide a comprehensive and cohesive regulatory structure for the fast-evolving digital asset landscape. Additionally, Senators Cynthia Lummis and Kirsten Gillibrand introduced a competing version of the Responsible Financial Innovation Act, further indicating the ongoing efforts to establish a robust regulatory framework for digital assets in the United States.
