House Passes Bill to Create SEC – CFTC Working Group to Foster Digital Asset Innovation in the United States
April 21, 2021
By Amy Davine Kim, Chief Policy Officer, Chamber of Digital Commerce
Yesterday, the U.S. House of Representatives passed H.R. 1602: “Eliminate Barriers to Innovation Act of 2021,” an important milestone for the digital assets industry in the United States. The historic bipartisan legislation would create a working group on digital assets between the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC), the two leading agencies that oversee digital asset markets in the United States, as well as key stakeholders, including industry groups, to eliminate barriers and promote innovation through competition.
Specifically, the digital asset working group is tasked with analyzing the U.S. legal framework for digital asset markets to identify areas where further clarity is needed and comparing it to other jurisdictions to determine U.S. competitiveness in these emerging markets. The group must also make policy recommendations to resolve the issues it identifies, including through development of standards and best practices.
The bill will now proceed to the U.S. Senate, where it is likely to be introduced in the Committee on Banking, Housing, and Urban Affairs. This legislation is an important step forward to obtain much needed clarity in the digital asset markets. Over the years, many legislators have tried to increase clarity – and we have supported these efforts. The bill enables a balanced review of the issues impacting digital assets and digital asset securities by all stakeholders – the SEC, CFTC, industry, consumer groups, and others – to ensure that appropriate guardrails are created to enable efficient growth in the marketplace.
The bipartisan nature of the legislation reflects the growing recognition in the U.S. Congress of both the rapid growth of the digital asset industry and the need to build and maintain a clear and uniform regulatory framework across agencies to position our industries for success in the coming decades. This is an urgent issue. The SEC’s recent enforcement actions against blockchain companies for distributing digital tokens as unlicensed securities offerings plainly illustrates the serious and market-moving consequences of ongoing regulatory confusion and opacity. In other words, the industry needs more guidance specific to the unique characteristics of digital assets and their markets. The legislation gives the working group a year to come together and identify how to resolve regulatory issues surrounding digital assets, and to provide recommendations to relevant Congressional committees.
H.R. 1602 was introduced in the House on March 7, 2021 and referred to the Committee on Financial Services and Committee on Agriculture. For more information, see our blog post.