Senior Republican lawmakers in the House Financial Services Committee and House Agriculture Committee introduced a bill to regulate the digital asset industry, hoping to bring clarity to what they say is a confusing regulatory regime.
"The digital asset space is muddled with regulatory uncertainty, lack of authority, and a lacking framework for core operating principles," said Rep. Dusty Johnson, R-S.D., who chairs the House Agriculture Subcommittee on Commodity Markets, Digital Assets, and Rural Development, in a news release Thursday. "The crypto industry wants clarity and our collaborative bill gives both the CFTC (Commodity Futures Trading Commission) and SEC a seat at the table. Our bill establishes clear principles to ensure financial security and certainty as digital asset developers continue to innovate."
Mr. Johnson introduced the bill, known as the Financial Innovation and Technology for the 21st Century Act, Thursday with House Agriculture Committee Chairman Glenn "GT" Thompson, R-Pa., and Rep. French Hill, R-Ark., who chairs the House Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion.
The bill calls on the SEC and CFTC to propose joint rulemakings on digital assets and gives the CFTC new authority over digital commodity markets, separating it from the SEC's authority over digital securities.
In June, Mr. Thompson and House Financial Services Committee Chairman Patrick McHenry, R-N.C., released a draft discussion of the bill, which Democrats on the Financial Services Committee were critical of.
"The bill appears to halt any enforcement actions by the SEC against crypto firms, even when they have committed fraud," Rep. Maxine Waters, D-Calif., the top Democrat on the committee, said in a June hearing on the bill.
In general, Democrats in Congress have been supportive of SEC enforcement actions against cryptocurrency firms, while Republicans have called the approach "regulation by enforcement."
"As other counties move forward with digital asset regulatory frameworks and Chair Gensler continues his regulation by enforcement, the U.S. is falling behind," Mr. McHenry said in the Thursday news release. "Innovators need regulatory clarity and certainty to enable this technology to achieve its full potential. That's why Republicans introduced the FIT for the 21st Century Act to finally provide clear rules of the road so the digital asset ecosystem can thrive in the U.S."
Both committees will vote on the legislation next week, according to the news release.