KEY POINTS
- Rep. Rose said he hopes a Joint Advisory Committee will pave the way toward a regulatory framework
- He noted how the current enforcement-first approach to regulation 'isn't working'
- The SEC and CFTC have been on a turf war over which regulator should have oversight of digital assets
A new proposed legislation may see the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) cooperating on digital asset regulations instead of bickering about who should regulate the burgeoning sector.
Introduced by Rep. John Rose, R-Tenn., the Bridging Regulation and Innovation for Digital Global and Electronic (BRIDGE) Digital Assets Act seeks to establish a Joint Advisory Committee on Digital Assets.
A Committee to End Turf War?
The joint Committee will provide both the SEC and CFTC with "advice on the rules, regulations, and policies of the Commissions related to digital assets." The main purpose of the proposed bill is to "further the regulatory harmonization of digital asset policy between the Commissions."
Through the Committee, the two regulators will explore "methods for describing" the various facets of blockchain and crypto, including decentralization and functionality.
The bill comes amid continuing squabbling between the financial regulators about which Commission has jurisdiction over cryptocurrencies and the broader blockchain industry. It remains to be seen whether this new bill will finally bring the warring Commissions together for regulatory clarity and industry growth.
Highlights of the Bill
The BRIDGE Digital Assets Act is very clear on the leadership and membership of the joint Committee. Both Commissions will appoint at least 20 "nongovernmental stakeholders" – 10 from each regulator. There can only be one designated federal officer or employee from each regulator as part of the Committee.
The proposed legislation further noted that the Committee's appointees must include "digital asset issuers," individuals registered with the SEC who are "engaged" in crypto activities, academic researchers specializing in crypto, and lastly, "digital asset users."
Members of the joint Committee will "serve without compensation," the bill stated.
In Hopes of Changing an Approach That 'Isn't Working'
In a statement regarding his proposed bill, Rep. Rose, who is a member of the House Committee on Financial Services, said the U.S. should pave the way for a future where crypto can thrive.
He argued that the current approach by regulators is not what the industry needs. "The current heavy-handed, regulation-by-enforcement approach isn't working and is instead encouraging investment in this key innovation overseas."
Rose believes the Joint Advisory Committee focused on digital assets will provide a framework for the government and private sector partners, so stakeholders can "cooperate on a path toward success for the regulatory landscape of digital assets and private sector participants."
Crypto Users Hopeful, And Doubtful Too
Crypto users on X are hopeful that the bill is the first step toward making things right for the industry. On the other hand, there are still doubts about whether it will work should the bill be passed into law.
One user wants SEC Gary Gensler out of the regulatory agency first, noting that Gensler is "a cancer that needs [to be] removed." One user had similar views, saying Gensler's involvement in such an Advisory Committee will not bring any change to the crypto industry's current situation.
If the sec is involved especially Gary nothing will change from our current situation which is terrible 🤦♂️
— vincent (@vintage831) September 12, 2024
There are also concerns that the SEC will not cooperate, with one user saying the Wall Street regulator will only ignore what Committee members recommend, as that's what "they've done so far."
