A new legislative proposal seeks to revolutionize the regulatory landscape for cryptocurrencies by promoting shared oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Introduced by U.S. Representative John Rose of Tennessee, the “Bridging Regulation and Innovation for Digital Global and Electronic Digital Assets Act” (BRIDGE Digital Assets Act) aims to create a Joint Advisory Committee focused on digital assets. This committee would leverage the expertise of both regulatory bodies to foster a collaborative approach to cryptocurrency oversight.
Reforming Crypto Regulation
Rep. Rose criticizes the current regulatory approach, which he describes as “heavy-handed” and ineffective. He argues that rather than competing for control, the SEC and CFTC should work together with private sector experts to develop a comprehensive framework for digital assets.
The BRIDGE Act proposes the inclusion of 20 non-governmental experts from the cryptocurrency industry on the advisory committee. This body would meet at least twice a year and serve terms of two years. Additionally, Rep. Rose suggests that exploring decentralized technologies could offer significant benefits to traditional financial systems while ensuring investor protection.
Context and Challenges
This proposal follows previous efforts to standardize cryptocurrency regulations. In May, the U.S. House of Representatives passed a bipartisan bill aimed at sharing regulatory powers between the SEC and CFTC. However, the White House expressed reservations about the Financial Innovation and Technology for the 21st Century Act (FIT 21), though it indicated a willingness to negotiate on digital asset legislation.
The SEC and CFTC have a history of conflicting views on digital asset regulation. For instance, SEC Chair Gary Gensler has been non-committal about whether Ethereum (ETH) should be classified as a security or a commodity, while CFTC Chair Rostin Behnam firmly asserts that ETH is a commodity and should fall under CFTC jurisdiction.
Moving Forward
The BRIDGE Digital Assets Act represents another significant step in American efforts to regulate the complex and evolving cryptocurrency market. By promoting joint oversight, this bill aims to resolve regulatory ambiguities and better support innovation within the digital asset space.
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