Since 2022, there have been several digital asset bills introduced to Congress in an effort to regulate the cryptocurrency industry. While there have been over 50 bills introduced, four of them have gained significant attention and could have a major impact on the industry if passed.
One of these bills is the Financial Innovation and Technology for the 21st Century Act, which was introduced on July 20. This bill aims to create a regulatory framework for digital assets and clarify the jurisdiction of regulators. It would give the Commodity Futures Trading Commission (CFTC) the power to regulate digital commodities and provide clarity on the Securities and Exchange Commission’s (SEC) jurisdiction. Additionally, the bill would allow crypto assets labeled as securities to be re-labeled as commodities, potentially reviving projects that were previously shut down due to legal decisions.
Another bill of importance is the Responsible Financial Innovation Act (RFIA), also known as the Lummis-Gillibrand bill. This bill aims to clarify the roles of the SEC and CFTC in crypto regulation and provide greater consumer protection. It also addresses digital asset tax treatment and orders the Federal Reserve to process bank applications for master accounts from crypto firms on an equitable basis. The bill also covers the issuance of stablecoins by depository institutions and includes provisions for decentralized autonomous organizations (DAOs) in the tax code.
The Digital Asset Market Structure Bill (DAMS), introduced on June 1, is another bill that seeks to define the roles of the SEC and CFTC in regulating cryptocurrencies. It sets a framework for regulators to determine if certain cryptocurrencies are securities or commodities. Under the proposed bill, crypto exchanges would be able to register with the SEC as an alternative trading system (ATS) and the SEC would not be able to deny registration based on the trading of digital assets.
The Digital Commodity Exchange Act (DCEA) is another bill that has garnered attention in the cryptocurrency industry. It empowers the CFTC to register and regulate spot exchanges, bringing them under the same rules as other commodity exchanges. The bill also distinguishes cryptocurrencies that are not considered securities as digital commodities under the jurisdiction of the CFTC, while the SEC would oversee crypto securities offerings.
There are also several other crypto-related bills making their way through Congress. The Stablecoin TRUST Act and the Stablecoin Innovation and Protection Act are proposals focused on regulating stablecoins. The Crypto Consumer Investor Protection Act and the Crypto Exchange Disclosure Act were introduced in December 2022 but have seen limited movement. The Digital Asset Anti-Money Laundering Act, introduced by Senators Elizabeth Warren and Roger Marshall, aims to regulate crypto ATMs and ban financial firms from using crypto mixers.
Overall, these bills highlight the growing interest in regulating the cryptocurrency industry and provide insight into the potential future landscape of digital asset regulation. While the outcome of these bills is still uncertain, they demonstrate the important role that lawmakers play in shaping the future of the crypto industry.