Lawmakers in Washington, DC are set to revive efforts to pass a crucial market structure bill that aims to shape the future of the crypto industry in the U.S. After stalling last year, the Senate Agriculture and Banking Committees will hold hearings on Thursday to discuss their respective sections of the crypto legislation, with possible text revisions on the table. This move represents a significant step towards establishing legislative guardrails for digital assets in the country, potentially marking a watershed moment for the crypto industry.
The bill's objective
The proposed legislation, referred to as the Clarity Act, seeks to provide a clear regulatory framework for the multitrillion-dollar cryptocurrency market and major digital asset firms. By clarifying the roles of the Securities and Exchange Commission and the Commodities Futures Trading Commission in overseeing cryptocurrencies and setting well-defined token classifications, the bill aims to boost blockchain and crypto adoption in the U.S. Additionally, it proposes registration and compliance standards for various crypto brokerages and exchanges, making it easier for them to operate domestically. According to Summer Mersinger, CEO of the Blockchain Association, these regulations could attract more digital asset companies to the U.S., thereby stimulating economic growth and invigorating the crypto market. However, the complete implications for digital asset companies and investors remain uncertain until the draft legislation's language is finalized.
What's happening this week
This week, lawmakers will focus on three primary issues: the rewards linked to stablecoins, regulations surrounding decentralized finance (DeFi) platforms, and restrictions on public figures like former President Donald Trump from profiting from crypto ventures. Notably, Trump-affiliated entities have previously launched both a memecoin and a nonfungible token. Cody Carbone, CEO of the crypto trade association Digital Chamber, identified the issue of stablecoin rewards as the most significant hurdle in negotiations on Capitol Hill, admitting that both parties acknowledge the necessity of addressing it within the bill. Earlier this year, the American Bankers Association's Community Bankers Council requested that the Senate prevent affiliates of stablecoin issuers from offering customer rewards, highlighting that such products exploit a loophole in the previously passed Genius Act, potentially outshining traditional high-yield accounts.
On the DeFi front, crypto supporters are advocating to protect developers from facing prosecution when their technology is used for illicit purposes, such as money laundering. DeFi Education Fund's chief legal officer Amanda Tuminelli emphasized the need to ensure that technology is not unfairly burdened by obligations meant for individuals. Advocates are also pushing for the bill to include provisions for individuals to self-custody their crypto assets. Furthermore, they hope to incorporate elements from the Blockchain Regulatory Certainty Act related to software developers and blockchain services.