BitPlus Capital Broker Reveals Crypto bill sails through congressional committee, signalling a Win for the Industry

  • August 3, 2023 11:00 AM
  • Grand News Network

The advancement of this bipartisan bill by the House Financial Services Committee represents a significant step toward establishing a regulatory framework for cryptocurrencies in the United States.

A crypto expert Dr Michael Bosch at BitPlus Capital, says the cryptocurrency industry has been under scrutiny from regulators ever since investors suffered substantial losses due to the sudden collapses of prominent companies such as Celsius Network, Voyager Digital, and FTX. The lack of clear regulations has left investors vulnerable, and this bill aims to address these concerns.

The bill, passed by the HFSC, seeks to define whether a cryptocurrency should be classified as a security or a commodity. The aim is to expand the regulatory authority of the (CFTC) about the cryptocurrency industry. That expansion would provide a more comprehensive oversight framework for the sector, ensuring better investor protection. Additionally, the legislation clarifies the scope of authority for the SEC, a longstanding demand of cryptocurrency supporters who feel that the agency’s jurisdiction needs to be more streamlined.

This bipartisan effort to regulate cryptocurrencies is noteworthy as it signifies a consensus among lawmakers from both sides—several Democrats, including Reps. Jim Himes and Ritchie Torres joined committee Republicans in supporting the bill, indicating a collective commitment to addressing the crypto industry’s challenges.

The House Agriculture Committee is now scheduled to consider the bill, ensuring another key congressional body thoroughly examines the proposed regulations. This multi-committee approach highlights the significance of this legislation and showcases a comprehensive effort to develop a regulatory framework that will effectively govern the crypto industry.

This bill aims to bring stability and transparency to the cryptocurrency market by introducing clear regulations, which is crucial for its long-term growth and mainstream adoption. It will provide much-needed guidance for investors, businesses, and regulatory bodies, resulting in a more secure and robust digital asset ecosystem.

The main objective of this regulatory framework is to safeguard investors against possible fraudulent activities, manipulation of the market, and other risks linked to cryptocurrencies. By distinguishing between securities and commodities, the bill will further clarify the legal status of various cryptocurrencies, offering a more comprehensive understanding of their attributes and potential risks.

Expanding the CFTC’s oversight over the crypto industry is a significant step forward. The CFTC’s expertise in regulating commodity markets will contribute to strengthening the oversight mechanisms surrounding cryptocurrencies, ensuring fair and transparent trading practices. This increased oversight will protect investors and foster trust in the industry, attracting more participants and encouraging innovation.

Moreover, clarifying the SEC’s jurisdiction will address the concerns raised by crypto advocates regarding the agency’s perceived overreach. By establishing clear boundaries, this bill aims to balance investor protection and fostering innovation in the rapidly evolving digital asset space.

As the bill advances through the congressional process, lawmakers must engage with industry experts, market participants, and other stakeholders. This collaboration approach will aid in ensuring that the ultimate regulatory framework is both practical and effective while also addressing the distinct challenges of cryptocurrencies.

Crypto Companies Disputing the SEC’s Jurisdiction

While the SEC is steadfast in its position, most crypto companies strongly dispute its jurisdiction over the industry. They argue that cryptocurrencies should be treated as commodities rather than securities and, therefore, subjected to different regulations. This disagreement has led to a growing demand from crypto companies for Congress to enact laws clarifying cryptocurrencies’ legal status.

The Push for Congressional Action

Crypto companies have been increasing their efforts to convince Congress to enact legislation that deals with the uncertain regulations surrounding cryptocurrencies in recent months. They argue that clear guidelines would provide much-needed regulatory certainty and foster innovation and growth in the industry. The proposed laws aim to establish a framework that recognises cryptocurrencies as commodities, thus exempting them from the stringent securities regulations enforced by the SEC.

The Federal Reserve’s Role in Issuing Stablecoins

Besides the ongoing battle between crypto companies and the SEC, lawmakers are also considering a bill focusing on stablecoins. Stablecoins are digital currencies that reduce price fluctuations by linking their value to a stable asset, like a traditional currency or a commodity.

The bill seeks to give the Federal Reserve the authority to establish requirements for issuing stablecoins while preserving the oversight powers of state regulators.

Addressing Concerns from Democrats

To address concerns raised by some Democrats, including Representative Maxine Waters, the bill underwent modifications. Waters expressed worries that stablecoin issuers could evade stricter oversight by choosing to be regulated under state regimes instead. The amendments aim to strike a balance by ensuring that stablecoin issuers cannot avoid administration while clarifying the roles of both federal and state regulators in regulating stablecoins.

The Implications for the Crypto Industry

The outcome of the legal battle between the SEC and crypto companies, along with the potential passage of legislation clarifying the regulatory landscape, will have significant implications for the crypto industry. If the SEC’s jurisdiction is affirmed, crypto companies might face increased regulatory scrutiny, potentially impacting their operations and business models. On the other hand, if Congress passes laws recognizing cryptocurrencies as commodities, it could pave the way for a more conducive regulatory environment that encourages innovation and attracts investment.

Conclusion

The advancement of this bipartisan bill by the House Financial Services Committee represents a significant step toward establishing a regulatory framework for cryptocurrencies in the United States. With the House Agriculture Committee scheduled to review the bill, there is a clear commitment to developing comprehensive regulations that will protect investors and foster innovation in the digital asset industry.

This legislation will contribute to its long-term growth and stability by bringing clarity and oversight to the crypto market. Finding the right equilibrium between regulation and innovation is crucial in an ever-changing industry. That will create an environment that promotes responsible growth and maximizes the advantages of cryptocurrencies for all those involved.

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Organization: BitPlus Capital

Contact Person: Media Relations

Website: https://bitpluscapital.com/

Email: support@bitpluscapital.com

Country: Switzerland


Release Id: 0308235241

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