The US House of Representatives passed legislation that may finally establish clear regulations for crypto – if it is approved by the Senate.
The Eliminate Barriers to Innovation Act was first introduced by Republican Patrick McHenry in March and aims to endorse the creation of a collaboration between the Securities & Exchange Commission (SEC) and the Commodity & Futures Trading Commission (CFTC).
The collaboration group would have both SEC and CFTC employees that would advise on the usage of digital assets. Members of FinTech companies that are part of the crypto sphere may also join the group, as well as financial companies.
The goal of Congress is to clarify a series of questions that entities have, such as how regulations are affecting the digital asset markets and how the crypto market would make things more transparent and more efficient. It also plans to discover if the US laws are making the country more or less competitive when it comes to financial technology.
Another thing that the legislation wants to make clear is what security stands ought to be put in place for service providers and crypto custodians. McHenry declared:
“This is the first step in opening up the dialogue between our regulators and market participants and move to needed clarity.”
After the founders of derivatives exchange BitMEX were accused of violating the Bank Secrecy Act, Congress will also look into how crypto companies can best comply with the law.
The Eliminate Barriers to Innovation Act represents one of the first bills that truly address crypto.
Clarifications Could Later Create ETFs
Both the SEC and CFTC have had problems in clearly defining if cryptocurrencies are either securities or commodities. The infamous SEC vs Ripple lawsuit is an example of that, as SEC claims that XRP tokens represent securities, while Ripple argues that they are actually a commodity – commodities are outside the powers of SEC.
As the Biden administration works on this, the SEC delayed its decision regarding the approval of a Bitcoin ETF. If crypto regulations are established by Congress, we may see a Bitcoin ETF in the US, just how Canada already has several.