The U.S. House of Representatives passed a bipartisan financial services legislation to establish a digital asset working group to ensure collaboration between regulators and the private sector to foster innovation. This bipartisan “Eliminate Barriers to Innovation Act” seeks to bring regulatory clarity to the world of digital assets such as cryptocurrencies.
The H.R. 1602 bipartisan bill, the Eliminate Barriers to Innovation Act, was introduced by Rep. Patrick McHenry (R-NC) and Rep. Stephen Lynch (D-MA). It was among six bipartisan financial services-related bills passed by the House.
According to the bill, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are now required to establish a working group focused on digital assets. This working group will provide insight into how the U.S. can work with digital assets and innovative technologies to unleash their benefits.
The bill seeks to bring clarity to the roles of agencies such as the SEC and the CFTC in the regulation of digital assets such as cryptocurrencies in the U.S., primarily related to the ongoing debate on whether cryptocurrencies are securities or commodities. It will create critical collaboration between the SEC, the CFTC and the government to ultimately help create fair and transparent markets.
“As this technology continues to develop and deploy, it is extremely important that we consider the possible vulnerabilities that the wider adoption of digital assets might present while addressing the lack of clarity in the regulation of these financial instruments to mitigate potential harms that may occur,” Rep. Lynch said.
The working group will consist of appointees from the SEC and CFTC as well as representatives from financial technology companies, financial firms, and small businesses, among others. It has to be established within 90 days of the enactment of the legislation.
The working group will produce a report within a year that will include an analysis of the domestic regulatory framework and the developments in other countries relating to digital assets. The report also requests insight into best practices to reduce fraud, protect investors, and assist in compliance with obligations under the Bank Secrecy Act.
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