The Future of US Crypto May Rest on These 4 Digital Asset Bills

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Since 2022, at least 50 digital asset bills have reportedly been introduced in Congress, aiming to govern everything from stablecoins to the jurisdictions of US regulators.

However, at least four of them are considered to potentially have a major impact on the industry (if adopted) given the attention of lawmakers and the crypto industry.

Financial Innovation and Technology for the 21st Century Act

This bill introduced on July 20 aims to create a robust process for determining whether a digital asset is a commodity or a security and would clarify the jurisdictions of regulators.

Introduced by Republican members of the U.S. House Agriculture and Financial Services Committees, the bill would give the Commodity Futures Trading Commission (CFTC) power over digital commodities and clarity over the jurisdiction of the Securities and Exchange Commissions (SEC).

Introducing the Financial Innovation and Technology Act for the 21st Century. This bill establishes a regulatory framework for digital assets, protects consumers, promotes innovation, and positions America as a leader in finance and technology. #crypto https://t.co/0ihzY3MP0k

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

A process for crypto assets that have been tagged as securities would also have the option of being re-tagged as commodities, which could see some projects revived after being effectively shut down due to previous court rulings.

Responsible Financial Innovation Act (RFIA)

A bill with similar goals, known as the Lummis-Gillibrand or RFIA bill, seeks to clarify the roles of the SEC and CFTC in crypto regulation. It also aims to provide greater consumer protection by providing laws to prevent another FTX-like event from occurring, according to the Bills Fact Sheet.

The crypto asset industry is here to stay.

Today, @SenGillibrand and I are reintroducing landmark legislation to create a federal regulatory framework that allows crypto businesses and investors to thrive here in America while protecting consumers from bad actors. pic.twitter.com/z2pr0evWt2

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

Clarity on the tax treatment of digital assets is also covered, and the Federal Reserve would be required to process bank applications for crypto firms’ main accounts on a fair basis.

It would also see depository institutions be the only ones allowed to issue stablecoins, make room for Decentralized Autonomous Organizations (DAOs) in the tax code, and commission an advisory board as well as a host of regular industry reports.

Digital Assets Market Structure (DAMS) Bill

Introduced on June 1, DAMS is another bill aimed at defining the crypto-related roles of the SEC and CFTC and establishing a framework for regulators to determine whether certain cryptocurrencies are securities or commodities.

The bill attracts attention, on June 26, Rep. Maxine Waters sent letters to Treasury Secretary Janet Yellen and SEC Chairman Gary Gensler asking them to weigh in on the bill.

#RELEASE: Ranking Member @RepMaxineWaters Calls Out @USTreasury, @SECGov to Share Analysis of Republican Digital Assets Market Structure Bill | https://t.co/lloLm7Lho6 pic.twitter.com/qbPNMSRl5v

— United States House Committee on Financial Services (@FSCDems) June 26, 2023

Under the proposed bill, before a certain crypto token is granted commodity status, it would have to undergo certification with the SEC to prove that it is decentralized enough.

Crypto exchanges could register with the SEC as an alternative trading system (ATS) and the regulator could not deny registration due to a digital asset trading platform.

Crypto firm Prometheum is an SEC-registered ATS and can offer trading, clearing, settlement and custody of digital assets, although it is currently unclear which assets the SEC allows.

DAMS would clarify ATS rules and allow digital products and stablecoins to be traded on ATS platforms and the SEC would be required to allow brokers to hold cryptocurrencies if they meet the requirements.

Digital Goods Exchange Act (DCEA)

First introduced in September 2020, an updated version of the DCEA was last reintroduced in April 2022, adding that stablecoin providers could register as operators of fixed-value digital products, including registration and reporting requirements.

The DCEA grants the CFTC the power to register and regulate spot exchanges which are subject to the same rules as other commodity exchanges.

1/ We are proud to support the reintroduction of the Digital Commodity Exchange Act (DCEA). There is a growing consensus in Washington on the need for federal oversight of digital asset spot markets, and we believe the DCEA offers a smart framework… https://t.co/U0RMMOKBe9

— Blockchain Association (@BlockchainAssn) April 28, 2022

Cryptocurrencies that are not considered securities are labeled as digital products under the jurisdiction of the CFTC and the SEC would monitor offerings of crypto securities.

Crypto project developers could also voluntarily register with the CFTC to submit required disclosures to trade publicly and list their asset on an exchange.

Other invoices

Many other crypto bills are floating around in Congress with varying success. Stablecoin regulatory proposals have gone through the Stablecoin TRUST Act and the Stablecoin Innovation and Protection Act.

Related: Congress May Be Ungovernable, But US Could See Crypto Legislation In 2023

The Crypto Consumer Investor Protection Act and Crypto Exchange Disclosure Act were introduced in December 2022, but haven’t seen much movement since.

The Digital Assets Anti-Money Laundering Act was also introduced in December by Senators Elizabeth Warren and Roger Marshall to regulate crypto ATMs and ban financial firms from using crypto mixers. Warren promised his reintroduction in February, but this action has not yet taken place.

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