US crypto’s future could fall on these 4 digital asset bills

At least 50 digital asset claims have been filed since 2022 reportedly It was introduced into Congress with the aim of controlling everything from stablecoins to US regulatory jurisdictions.

However, at least four of them are seen as potentially having a significant impact on the industry (if passed), given the attention they received from both lawmakers and the crypto industry.

Financial Innovation and Technology Law for the 21st Century

The bill, which was introduced on July 20, aims to create a robust process for determining whether digital assets are commodities or securities, and would clarify the jurisdiction of regulators.

The bill, introduced by Republicans on the U.S. House Agriculture and Financial Services Committees, gives the Commodity Futures Trading Commission (CFTC) power over digital commodities and clarifies the jurisdiction of the Securities and Exchange Commission (SEC).

Introducing financial innovation and technology law for the 21st century. The bill establishes a regulatory framework for digital assets, protects consumers, fosters innovation, and positions America as a leader in finance and technology. #cipher https://t.co/0ihzY3MP0k

— House Agriculture Committee (@HouseAgGOP) July 20, 2023

The process of crypto assets labeled as securities will also be given avenues to be relabeled as commodities. This could lead to the resurrection of some projects after they were effectively shut down due to past legal decisions.

Responsible Financial Innovation Act (RFIA)

The Lumis-Gillibrand Act, or a bill with a similar purpose, known as the RFIA, aims to clarify the roles of the SEC and CFTC in cryptocurrency regulation. It also aims to increase consumer protection by enacting legislation that “prevents events like FTX from happening again,” according to the bill’s fact sheet.

The crypto industry will survive.

today, @Sengiri Brand And I am reintroducing a landmark piece of legislation that creates a federal regulatory framework that allows crypto businesses and investors to thrive here in America while protecting consumers from the bad guys. pic.twitter.com/z2pr0evWt2

— Senator Cynthia Lummis (@SenLummis) July 12, 2023

Clarifying the tax treatment of digital assets is also covered, with the Federal Reserve being mandated to “fairly” process bank applications for master accounts from cryptocurrency companies.

It will also allow only depository financial institutions to issue stablecoins, make room in tax law for Decentralized Autonomous Organizations (DAOs), and commission an advisory board along with a number of regular reports on the industry.

Digital Asset Market Structure Act (DAMS)

DAMS, filed on June 1, is another bill that aims to define the crypto-related roles of the SEC and CFTC and set a framework for regulators to determine whether a particular cryptocurrency is a security or a commodity.

The bill has received some attention, and on June 26, Rep. Maxine Waters wrote to Treasury Secretary Janet Yellen and SEC Chairman Gary Gensler asking them to consider the bill.

#release: Ranking members @rep_0525 call @US Treasury, @SECGov Share Analysis on Republican Digital Asset Market Structure Bill | https://t.co/lloLm7Lho6 pic.twitter.com/qbPNMSRl5v

— US House Financial Services Committee (@FSCDems) June 26, 2023

The proposed legislation would require certain crypto tokens to be certified by the SEC to prove they are properly decentralized before being granted commodity status.

Cryptocurrency exchanges will be able to register with the SEC as Alternative Trading Systems (ATS), and regulators will no longer be able to deny registration because they are platforms that trade digital assets.

Cryptocurrency company Promethium is an SEC-registered ATS that can offer trading, clearing, settlement and custody of digital assets, although it is currently unclear what assets the SEC will allow.

DAMS will be required to clarify ATS rules to allow digital commodities and stablecoins to be traded on the ATS platform, and SEC will allow broker-dealers to store cryptocurrencies if requirements are met.

Digital Commodities Exchange Act (DCEA)

First introduced in September 2020, the updated version of the DCEA was finally reintroduced in April 2022, adding that stablecoin providers can register as “Fixed Value Digital Commodity Operators”, including recording and reporting requirements.

The DCEA authorizes the CFTC to register and regulate spot exchanges that operate under the same rules as other commodity exchanges.

1/ We are proud to support the reintroduction of the Digital Commodities Exchange Act (DCEA). With a growing consensus in Washington that federal oversight of the digital asset spot market is needed, we believe the DCEA will launch an intelligent framework for… https://t.co/U0RMOKBe9

— Blockchain Association (@BlockchainAssn) April 28, 2022

Cryptocurrencies that are not considered securities are labeled as digital goods under CFTC jurisdiction, and the SEC will crack down on the offering of cryptocurrency securities.

Developers of cryptocurrency projects can also voluntarily register with the CFTC to submit disclosures required to open and list their assets on exchanges.