Regulation

Congressman Reveals New Crypto Bill For SEC & CFTC Joint Regulation

Published

3 months ago

September 12, 2024

Tennessee Congressman John Rose, a member of the Financial Services Committee, is introducing a new crypto bill aimed at reshaping the regulation of digital assets in the United States.

The proposed bill is titled the “Bridging Regulation and Innovation for Digital Global and Electronic Digital Assets Act” or the “BRIDGE Digital Assets Act” bill. It seeks to establish a Joint Advisory Committee on Digital Assets with representatives from both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Contents of New Crypto Bill

The Joint Advisory Committee will be responsible for offering advice on the rules, regulations, and policies concerning digital assets. According to the bill’s text, its goal is to promote regulatory harmonization between the SEC and CFTC. These two agencies currently oversee different aspects of crypto regulation.

Hence, the proposed committee in the crypto bill will be tasked with finding ways to quantify aspects of digital assets. These include decentralization, functionality, and security. Moreover, Congressman Rose stated that the existing “regulation-by-enforcement” strategy is not working and is instead driving innovation and investment abroad. Moreover, earlier today eToro trading platform settled with the Securities and Exchange Commission to pay $1.5 million which many attribute to stifling innovation.

🚨SCOOP: Republican Tennessee Congressman @RepJohnRose, who sits on the @FinancialCmte, is introducing a new bill called the “BRIDGE Digital Assets Act” that would establish a Joint Advisory Committee on digital assets between the @SECGov and the @CFTC.
The purpose of the…
— Eleanor Terrett (@EleanorTerrett) September 12, 2024

“The Joint Advisory Committee on Digital Assets will provide a framework for the government and private sector partners to cooperate on a path toward success for the regulatory landscape of digital assets and private sector participants,” said Rose. Furthermore, he emphasized the need for collaboration between the government and private entities for better regulation.

Additionally, the crypto bill mandates that the committee consist of at least 20 members from the private sector. The members will include digital asset issuers, academic researchers, and users of digital assets. These stakeholders would serve as advisors to both the SEC and CFTC on how best crypto regulation would be applied while also encouraging innovation.

Addressing Current Regulatory Gaps

The BRIDGE Digital Assets Act is positioned as a response to growing frustration in the crypto industry over the lack of clarity and consistency in digital asset regulation. The SEC and CFTC have often clashed over jurisdiction, with the former treating certain cryptocurrencies as securities and the CFTC viewing them as commodities.

Thus, the Joint Advisory Committee is intended to bridge this regulatory divide. This will ensure that the agencies are aligned on key policies. In addition, the committee would also explore the potential for blockchain technology and distributed ledger systems to enhance the financial market infrastructure.

It would focus on improving customer protections, increasing transparency, and reducing transaction costs. It will also expand access to financial services through digital assets. The crypto bill requires the SEC and CFTC to jointly adopt a charter for the committee within 90 days of the bill’s enactment.

Members would be appointed within 120 days, and the committee would hold its first meeting within 180 days. Meetings would occur at least twice a year, with additional sessions as needed at the request of either commission.

If the bill is passed, the BRIDGE Digital Assets Act could mark a significant step toward crypto regulation. However, currently, the SEC is facing scrutiny as Chairman Gary Gensler faces illegal hiring allegations. This uncertainty could negatively impact the potential collaboration between the SEC and CFTC.