The United States may finally get a clear set of laws for the cryptocurrency industry. The European Union is putting into effect precise regulations. While the EU crypto rules going into effect are very complete, the American Congress has been bogged down in committee work both in the House of Representatives and the Senate. Finally, a framework for crypto regulation passed in an important Congressional Committee. This is just one house of Congress. Senators are working on their own legislation and a final bill will need a set of compromises before being sent to the President for his signature.
House Financial Services Committee Is First Hurdle for House Crypto Bill
Bloomberg reports that the Financial Services Committee in the House of Representatives has passed aregulatory framework bill for cryptocurrencies. The proposed legislation will specify when a crypto business needs to register with either of the main regulators, the Securities and Exchange Commission or the Commodity Futures Trading Commission. The new law would set up procedures for determining if a blockchain network is sufficiently decentralized that it would be regulated by the CFTC instead of the SEC. The proposed law will mandate that the CFTC and SEC work together to set rules for who governs what and also study issue such as decentralized finance and non-fungible tokens. One specific aspect of the proposed legislation conforms to the recent decision about Ripple Labs in which the judge said that just because crypto is sold as part of an investment contract that does not automatically make it a security.
House Agriculture Committee Is Next Stop For Crypto Legislation
This committee oversees the Commodity Futures Exchange Commission which would regulate much of the crypto sector. The Agriculture Committee will provide additional funding for the CFTC to cover the costs of the extra work this would entail. Once the Agriculture Committee passes on their version of crypto legislation it will need to be negotiated so that a single, comprehensive bill can be voted on by the entire House of Representatives. Then it would go to the US Senate for consideration.
US Senate Next Stop For Crypto Bill
In general, the Republican controlled House of Representatives is more excited about the prospects of crypto currencies and the Democrat controlled Senate is more skeptical. Thus, any bill that passes a full vote in the House of Representatives may be watered down or totally changed in order to pass in the Senate. Final agreement is often completed in a joint committee after the bill passes both chambers of Congress. A comment from the Democratic side is that the current regulations do not need to be clarified for companies in the crypto realm. They just need to be followed. When and if the current bill or a modified form of it is ready, it needs to go to the President for his signature. It is common that when a President does not like a law that he vetoes it. What is the case today is that the Republicans do not have the two-thirds majorities in both houses of Congress needed to override any Presidential veto!
Framework for Crypto Regulation Passes an Important Congressional Committee – SlideShare Version