The ‘Eliminate Barriers To Innovation Act’ is set to be released soon. This Act will see both the CFTC (Commodities Futures Trading Commission) and the SEC (United States Securities and Exchange Commission) working alongside one another in the hopes of establishing a working group based around digital assets.
This decision had been made by the United States House of Representatives. The House had managed to approve legislation that would shed some light and provide some much-needed clarity on the rules and regulations regarding cryptocurrencies and also whether they are to be considered as commodities or as securities. Before anything, though, the legislation needs to first be approved through the Senate as well as being signed off by the current President, Joe Biden, himself.
Several other parties to join in
The aforementioned working group shall not only comprise of both CFTC and SEC staff but will also include various other FinTech institutions and companies who have worked with digital assets in the past or are currently working with them. Additionally, academic scientists and researchers, investor watchdog teams, and financial firms which are overseen by the CFTC or the SEC will also be included. Lastly, relatively smaller FinTech organizations and firms who may be a bit underrepresented but who nevertheless provide some much-needed support to undeserved companies and businesses will also be included.
As for the timeline, this working group shall be granted one year for the purpose of analysing the United States’ current regulations and laws regarding digital assets and commodities. Moreover, Congress would ideally want the group to provide answers to various subjects of interest, such as the effect that regulations would have on the crypto markets, as well as how to ensure that these markets could conduct their business in a more fair and unbiased way, how to improve efficiency, transparency and effectiveness, what kind of security standards must be implemented for the custodians along with other related intermediaries (and how to help prevent money laundering schemes and financial terrorism), and lastly to ascertain whether the laws that the U.S is making are having a positive or adverse effect on the competitive nature of financial technology in the country.
‘The Act is the 1st step towards initiating a dialogue, says McHenry
Representative McHenry stated that the working group and the Act are only the first steps that are needed to initiate a dialogue between the market participants and the regulators in order to improve clarity. Clarity is an ‘absolute must’ according to McHenry, and the sooner it is here, the better it would be for everyone involved. McHenry also used the example of how Ripple’s Chris Larsen considered shifting the company to outside of U.S borders, which only highlights the need for an open discussion and a more ‘pro-U.S’ mindset regarding crypto.