Representative French Hill of Arkansas has been working on cryptocurrency reform for nearly five years and is now Vice Chairman of the House Financial Services Committee, which is set to discuss two crucial pieces of legislation this month. These proposed bills could provide regulatory clarity for the sector and protect investors, innovators, and those dealing with digital assets and related technologies.
Cryptocurrency has been under scrutiny due to its use for funding terrorist activities or illegal trade. In addition, some crypto exchanges have failed and are now facing investigations from the U.S. Securities & Exchange Commission (SEC). This has caused companies to move to Europe, Japan, and Singapore, where regulations are more established.
The digital asset market structure proposal is 165 pages long and seeks to modify financial regulations from the 1930s and 1940s for the crypto industry. It covers topics such as anti-fraud rules, enhanced disclosure requirements, and how to define when a cryptocurrency can be classified as a security or a commodity.
The other draft proposal deals with regulations for stablecoins. These are not the same as Central Bank Digital Currencies (CBDCs), which are managed by the Federal Reserve. Stablecoins would add stability to cryptocurrency valuations, leading to more practical uses for digital currencies.
Reception for these draft bills has been positive, though some have raised concerns about whether the proposed bill gives enough oversight of digital commodity exchanges and brokers. Lawmakers want to create a regulatory framework to stop the crypto industry from leaving the U.S. and to stop more companies, entrepreneurs, and money from being lost.
At a virtual town hall with entrepreneurs, Hill said that the most important thing regulators can do right now is “do no harm” with these bills. He believes that the U.S. could become a leader in the industry and that the ecosystem could revolutionize how business is conducted while fighting corruption.
This guide to cryptocurrency terms provides additional information about distributed ledgers, blockchains, stablecoins, CBDCs, and Web3.
