Legislator suggests creating joint CFTC-SEC committee to streamline digital asset regulations
Congressman John Rose has put forward a new bill to simplify regulations for digital assets by establishing a Joint Advisory Committee managed by the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).
The BRIDGE Digital Assets Act, presented in the House, aims to encourage cooperation between the two agencies on important policies related to digital assets.
Both regulators have expressed a desire to regulate the industry based on their differing views that some cryptocurrencies are commodities while others are securities. However, the lack of clarity on classifications has been a major factor contributing to regulatory uncertainty in the US.
Rose stated:
“The United States needs to create an environment where digital assets can flourish… The current approach of heavy-handed regulation by enforcement is not effective and is driving investment in this important innovation overseas.”
Joint Advisory Committee
The advisory committee will advise both the SEC and the CFTC on rules and regulations for digital assets, focusing on key aspects such as decentralization, functionality, information disparities, and network security.
The bill aims to establish a unified framework for digital assets, which currently face fragmented and conflicting regulations, by aligning the regulatory approaches of both agencies.
In addition to regulatory alignment, the BRIDGE Digital Assets Act underscores the potential of blockchain technology to enhance financial markets.
The committee will explore how blockchain and distributed ledger technologies can lower transaction costs, increase transparency, and improve customer protections, including enhanced security for customer funds and more accessible financial services.
Timeline and details
The committee will comprise at least 20 nongovernmental members, evenly appointed by the CFTC and SEC. Stakeholders will include digital asset issuers, registered participants in digital asset-linked activities, academic researchers, and digital asset users.
Members will not receive compensation but will be reimbursed for travel expenses associated with committee meetings. The bill requires the committee to meet at least twice a year and submit its findings and recommendations to both regulatory agencies, who must publicly respond within three months.
The bill outlines a clear timeline for implementation, mandating the CFTC and SEC to establish a joint charter for the committee within 90 days of the bill’s enactment. Additionally, the agencies must appoint members within 120 days and hold the committee’s inaugural meeting within 180 days.
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