Congress passes digital asset innovation act to clarify crypto regulations

U.S. financial regulators will now work together to create modalities for clear-cut crypto regulations in America.

The U.S. House of Representatives on Tuesday passed H.R. 1602 — the Eliminate Barriers to Innovation Act — introduced by Congressman Patrick McHenry (R-NC).

H.R. 1602 was among six bipartisan financial services-related bills passed by Congress on Tuesday with the McHenry-sponsored legislation focusing on regulatory clarity for cryptocurrencies.

Introduced back in March, the bill seeks to clarify the roles of agencies like the Securities and Exchange Commission and the Commodity Futures Trading Commission in the policing of cryptocurrencies in the U.S.

The bill also seeks to answer the ongoing debate of whether crypto tokens are securities or commodities.

Addressing the floor of the House during the passage of the bill, Representative McHenry remarked:

“[This bill] requires the Securities and Exchange Commission and the Commodity Futures Trading Commission to establish a working group focused on digital assets. This is the first step in opening up the dialogue between our regulators and market participants and move to needed clarity.”

#BREAKING: The House just passed 6 bipartisan Financial Services bills, including Ranking Member @PatrickMcHenry’s Eliminate Barriers to Innovation Act.

Learn more: https://t.co/jYrqQbSxXf

Watch the Ranking Member’s remarks pic.twitter.com/BAAyEf91qy

— Financial Services GOP (@FinancialCmte) April 20, 2021

Following the approval of the bill, Congress now has 90 days to establish the working group among participants from the SEC, CFTC, and the private sector.

The private sector participants will draw from fintech and financial services companies as well as small and medium scale enterprises and academia.

Once constituted, the working group will have a year to issue a report analyzing the current crypto regulatory climate. The panel’s work will also focus on matters like crypto custody, cybersecurity, private key management, and investor protection concerns.

The patchwork nature of crypto regulations in the U.S. continues to be a source of some frustration among industry stakeholders in the country. Some industry insiders have argued that the U.S. was at risk of losing ground in the emerging digital economy due to the lack of regulatory clarity for digital assets.

Earlier in April, Goldman Sachs CEO David Solomon predicted a big evolution for crypto regulations in the U.S.