Rep. Patrick McHenry (R-N.C.), chair of the House Financial Services Committee, and Rep. Glenn Thompson (R-Pa.), chair of the House Committee on Agriculture, released a discussion draft of legislation providing a statutory framework for digital asset regulation. The draft is intended to provide clarity, fill regulatory gaps, and foster innovation, while providing adequate consumer protections.
“This discussion draft is the first step toward delivering on Republicans’ commitment to develop clear rules of the road for the digital asset ecosystem,” McHenry said. “Our goal is to strike the appropriate balance between consumer protection and encouraging responsible innovation. This is the product of an unprecedented joint effort between the House Financial Services and Agriculture Committees, which gives us a better shot at striking that balance. I encourage stakeholders and market participants to provide constructive feedback to help us improve our legislation.”
The draft legislation sets a framework for the separate and complimentary regulatory responsibilities and oversight authorities for both the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). Digital commodity exchanges, digital commodity brokers, and digital commodity dealers will be registered with the CFTC and broker-dealer and alternative trading systems will file with the SEC.
The proposed legislation would exclude digital commodities and other digital assets from the definition of “security” under the securities laws. The SEC will provide antifraud authority over transactions with stablecoins.
“For months, our committees have worked collaboratively to establish a viable regulatory framework for digital assets necessary to protect consumers and promote American innovation. Today’s release of the discussion draft brings us one step closer to bringing regulatory certainty to these novel and emerging technologies,” Thompson said. “This historic joint effort with the House Committee on Financial Services aims to close existing authority gaps between the CFTC and SEC and bolster U.S. leadership in financial and technological innovation.”