On Monday, four Republican deputies presented a draft aimed at establishing a regulatory framework for digital assets in the United States. If the bill is passed, the encrypted assets certified as fully “decentralized” will be classified as commodities and governed by the Commodity Futures Trading Commission (CFTC). Assets considered to be centralized would be supervised by the Securities and Exchange Commission (SEC).
According to the X post of Justin Slote, Vice-President for Regulation of the Encryption Windward Company Paradigm, “In general, the Act again establishes the status of the CFTC as the main encryption money regulator, but the SEC has jurisdiction until the network is decentralised”.
The draft discussion was co-authored by Hill, Arkansas, France, G.T. Thompson, Pennsylvania, Brian Steiner, Wisconsin, and Dusty Johnson, South Dakota. It should be noted that the draft was discussed for public comment and did not formally enter the legislative process.
In a statement, Hill and Thompson stated: “The draft discussion advanced President Trump's vision of the United States as the world's home of encrypted currencies and strengthened its leadership in the global financial system by providing strong security and late regulatory certainty.”
The draft is considered to be a “incremental but meaningful” rewrite of the FIT21 Market Structure Bill, which was adopted by the House of Representatives last year. The Financial Innovation and Technology Bill for the 21st Century (FIT21) was intended to put an end to the “competition” between the SEC and the CFTC for the control of encrypted currency, which was passed through the House of Representatives with broad support from both parties, but was not voted in the Democratic-controlled Senate.
The 212-page draft discussion published on Monday also sought to establish disclosure requirements for digital asset developers, to give individuals the right to self-custody in encrypted currency, to develop new consumer protection measures and to allow states to regulate digital assets. In addition, the Agriculture Commission and the Financial Services Commission are planning to hold joint hearings on market structure legislation on Tuesday.
Two other relevant legislation currently under consideration in Congress include the Genius Bill and the Stability Bill, all of which involve the regulation of the issuance of United States dollar-linked stabilization currency. However, the Genius Bill suffered a setback when nine Democrat parliamentarians withdrew their support, arguing that “many issues remain to be resolved in the current Bill”.