US senators recently proposed a bill to create a regulatory framework for cryptocurrencies, aimed at clarifying the jurisdiction of financial regulators and promoting the adoption of digital assets. The crypto industry has long sought such legislation to address the ongoing issues facing crypto companies. The bill would distinguish between crypto tokens as securities or commodities, providing much-needed legal clarity.
The proposal grants the U.S. Commodity Futures Trading Commission (CFTC) the authority to oversee crypto spot markets, which is favored by the industry over the U.S. Securities and Exchange Commission (SEC). The legislation also addresses banking industry concerns over stablecoin legislation, suggesting a solution to a loophole that allowed intermediaries to pay interest on these assets, which banks fear could threaten financial stability by siphoning off deposits from insured institutions.
Under the new bill, crypto companies will be prohibited from paying interest solely for holding stablecoins, but they will be able to offer rewards for specific activities such as payments or loyalty programs. A joint rule from the SEC and CFTC would require clear disclosures about rewards related to stablecoin use.
The Senate Banking Committee will soon debate this bill, while the Senate Agriculture Committee will work on its version. The House of Representatives previously passed its version, but discussions in the Senate were stalled due to divergent views. As the election approaches, some lobbyists are doubtful of the bill’s chances of becoming law, leaving crypto companies dependent on regulatory guidelines that could change with future administrations.
With information from Reuters
