US Senate bill focuses on reforming Cryptography

The US Senate is working on a bill to convert digital assets initially classified as securities to be regulated as commodities.

The proposed legislation offers a path to digital asset regulation, providing clarity and consistency in the evolving cryptocurrency landscape.

The bill takes a fresh look at digital assets

The Market Structure Bill serves as an initial point of discussion for Republicans and Democrats from House committees, along with the Senate, regulators and the private sector.

By design, the bill aims to facilitate inclusive and collaborative conversations regarding market structure reforms, addressing the needs and concerns of various stakeholders.

The proposed legislation defines criteria for a network to be considered decentralized, including the lack of unilateral authority or significant ownership by a token issuer or affiliated person.

The bill allows token issuers to certify decentralization to the SEC, but the agency retains the ability to veto within a 30-day time frame, with the possibility of a 90-day extension.

This bill comes two months after the Chairman of the Securities and Exchange Commission, Gary Gensler, emphasized the need for these platforms to comply with existing regulations. He particularly highlighted the importance of complying with either securities laws or regulations set forth by the CFTC when dealing with US investors.

Democrats share this view, while the cryptocurrency industry is calling for clearer and more meaningful rules and urging the US Congress to intervene.

The bill, introduced by Republican presidents, provides guidance on registering the platform with the SEC, the CFTC, or both. In addition, it mandates the two organizations to cooperate in identifying and supervising exchanges that are double-registered.

Provide organizational clarity

During this transition period, platforms will have the opportunity to file an interim registration statement with either the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC).

The ruling aims to provide regulatory clarity and allow platforms to continue operating while adhering to evolving regulatory requirements.

The proposed legislation in the US comes at the same time that the European Union (EU) formally signed into law the Rules for Markets in Crypto Assets (MiCA), another comprehensive regulatory framework for the digital currency industry.

In preparation for the framework, the European Parliament highlighted a study suggesting that crypto assets should be treated as securities by default, a position aligned closely with US policymakers.