Crypto Market Structure Bill: A New Dawn for Digital Assets
Cryptocurrency Legislation Proposed by House Committee - Sigel of VanEck Praises the Initiative as a Strong Foundation
The U.S. House Committee on Financial Services unveiled a potential game-changer for the crypto industry with the proposed Digital Asset Market Structure Bill draft. If enacted, this bill will provide much-needed clarity on digital asset regulations.
The new bill aims to address concerns raised by the Securities and Exchange Commission (SEC) in their recent enforcement actions, focusing on issues like the sale of digital commodities and their relation to securities. The draft suggests that the sale of digital commodities isn't considered a security if the purchaser doesn't acquire ownership interests in the issuer's business, profits, or assets [1].
VanEck's head of digital research, Matthew Sigel, finds the draft to be an 'upgrade' from the previous bill and a 'solid start'. In contrast to the earlier legislation, this bill attempts to streamline regulatory oversight by defining jurisdiction for tokens and coins, clarifying the roles of the SEC and Commodity Futures Trading Commission (CFTC) [2].
One notable development in the draft is the definition of stablecoins as non-securities and the exemption of non-custodial DeFi protocols. However, it's important to note that this exemption doesn't restrict the agencies' authority to enforce laws against fraud, false reporting, or market manipulation [2].
This is the second attempt by the U.S. authorities to craft a crypto market structure bill since the Financial Innovation and Technology for the 21st Century Act (FIT21). The FIT21 bill, passed with bipartisan support in the House of Representatives in May 2024, is currently awaiting the US Senate's approval [3].
Considering the ongoing debates in the regulatory space for cryptocurrencies, the bill's progress has faced a few hurdles, such as a recent derailed House hearing. Despite these challenges, the bill represents a significant step forward for the digital asset industry, paving the way for clearer guidelines [4]. The bill's next steps involve seeking feedback from stakeholders, followed by a formal introduction in the House, review, and a floor vote. Afterward, the Senate vote and the presidential action will take place before the bill becomes law [5].
In summary, the proposed Digital Asset Market Structure Bill aims to provide much-needed regulatory clarity for the crypto industry, defining which digital assets fall under the SEC and CFTC, and offering a path for digital assets to transition from being securities to commodities under certain decentralization criteria [2][4]. The bill has been well-received by industry experts, who view it as an upgrade from the previous bill and a solid start to U.S. crypto regulation [2].
[1] Source: House Committee on Agriculture [Excerpt of the discussion draft][2] Source: House Committee on Financial Services[3] Source: House of Representatives[4] Source: Wall Street Journal[5] Source: CoinDesk
- The Digital Asset Market Structure Bill, a potential game-changer for the crypto industry, proposes to classify digital assets under the jurisdiction of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
- The bill suggests that the sale of digital commodities won't be considered securities if the buyer doesn't have ownership interests in the issuer's business, profits, or assets.
- VanEck's head of digital research, Matthew Sigel, considers the bill an upgrade from the previous legislation, as it streamlines regulatory oversight and defines jurisdiction for tokens and coins.
- The draft defines stablecoins as non-securities and provides an exemption for non-custodial Decentralized Finance (DeFi) protocols.
- The bill's progress has faced some obstacles, such as a recent derailed House hearing, but it remains a significant step forward for the digital asset industry, offering clearer guidelines.
- The bill's next steps involve seeking feedback from stakeholders, a formal introduction in the House, review, a floor vote, followed by the Senate vote and presidential action.
- If enacted, the Digital Asset Market Structure Bill will provide much-needed clarity on digital asset regulations in the crypto market, enabling digital assets to transition from being securities to commodities under certain decentralization criteria.
