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Cryptocurrency, Featured

US House of Representatives Pass Crypto Regulation Bill

Cryptocurrencies are the leading forms of decentralized finance. These currencies offer an alternative to the centralized currencies such as the fiat currency. Cryptocurrencies have the potential to break free from the shackles of financial exclusion and grant financial freedom. However, many governments and central banks are aware of this potential and want to regulate cryptocurrencies. This is one of the reasons the US House of Representatives passed the crypto regulation bill.

Brief Description of the Crypto Regulation Bill

The Financial Innovation and Technology for the 21st Century Act (FIT21) is a record in itself. This is the first time the US House of Representatives has passed the bill. Soon, the bill will become a law, once the Senate approves it. The supporters of the bill argue that the bill will offer regulatory clarity and remove ambiguities. Representative Maxine Waters strongly supports the bill and wants to ensure that the crypto businesses that are dodging security issues should now accept responsibility instead of evading them. 

SEC Chair Gary Gensler however holds contrarian views and said that the legislation is too lengthy. He described it as not necessary and can endanger existing securities regulations. Furthermore, he claims that FIT21 overlooks long-standing precedent on regulating contracts. It also creates difficulties for the agency to certify self-proclaimed digital commodity issuers. The bill can remove investor protections and make them more vulnerable by exposing them to excessive risks without disclosures. 

Stated Purpose of the Crypto Regulation Bill

The stated purpose of the crypto regulation bill is by and large bonafide. The bill will help digital asset developers to provide accurate and relevant details. It should also include information about the structure, ownership, and project’s operation. The digital asset customers will have institutions that can have written obligations, exchanges, brokers, and dealers. 

The bill aims to empower the market by safeguarding asset projects. It will offer developers the pathway to raise funds and create a clear process. It will help in determining whether the bill will fall under the CFTC or SEC jurisdiction. Moreover, the bill seeks to establish links between the two jurisdictions.

Also Read- Importance and Potential of Blockchain Technology in Supply Chain Management.

Conclusion

The attitude of the US government towards cryptocurrencies is witnessing a paradigm shift. The bill has its share of benefits and it may inevitably reduce the chances of unlawful use and corruption considerably. However, it can also have an adversarial impact on the investors of cryptocurrencies as pointed out by the SEC Chair. The changing attitudes of the US government indicate that cryptocurrencies are going to get mainstream acceptance and may soon become the most suitable alternative to fiat currencies in the future.

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