A collaborative effort between the Republican members of the US House Financial Services Committee and the House Agriculture Committee has resulted in developing a discussion draft for digital asset regulation. 📜
Named the Digital Asset Market Structure Discussion Draft, the proposed legislation is focused on clarifying the categorization and regulation of digital assets.
Key elements of the proposed legislation include:
- A clear definition of when a digital asset is to be classified as a security would place it under the jurisdiction of the Securities and Exchange Commission (SEC).
- The creation of a system for how digital assets are processed and the registration of intermediaries with the SEC or Commodity Futures Trading Commission (CFTC).
- The specification of the roles of the SEC and CFTC, with the CFTC to oversee digital commodities and the SEC given jurisdiction over digital assets offered as part of an investment contract.
- A requirement for the SEC and CFTC to collaborate on rulemaking processes related to certain terms and the management of dual-registered exchanges.
- A framework outlining the circumstances in which certain digital assets would transition to decentralized commodities under the CFTC, leaving the SEC’s jurisdiction.
The legislation also proposes the formation of a joint CFTC-SEC Advisory Committee on Digital Assets, tasked with advising both the SEC and CFTC on digital assets and conducting a joint study on decentralized finance. 🤼
However, some provisions exist for the SEC to object to these changes, provided they can supply a detailed analysis.
The draft was not shared with Democrats before its announcement on Friday, and the House Agriculture Committee plans to hold a hearing next week titled “The Future of Digital Assets: Providing Clarity for Digital Asset Spot Markets.” 📢