U.S Lawmakers Release Regulations For Cryptocurrency

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The U.S crypto investors have been on a different page with the regulatory authorities on the activities of the digital asset class. While the cryptocurrency community believes that the regulations are inconsistent, law makers also want to oversee the adoption of crypto in the country.

As a result, a bipartisan pair of U.S. senators released a bill on Tuesday that would establish new cryptocurrency regulations, and hand the bulk of their supervision to the Commodity Futures Trading Commission (CFTC).

CFTC To Oversee Cryptocurrency Regulations

Republican Senator Cynthia Lummis and Democrat Senator Kirsten Gillibrand introduced the bill to control cryptocurrency’s rapid growth and adoption rate.

The bill will ensure that CFTC, not the Securities and Exchange Commission, will primarily oversee the regulation of cryptocurrency market because they operate like commodities and not securities. 

CFTC is suited to be a regulator for cryptocurrency, unlike the SEC that typically classify crypto products as securities and most adhere to a host of securities requirements.

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With the midterm elections looming, the bill is not expected to be passed in the current session of Congress. However, the framework for future debates on how to manage the cryptocurrency market is established. 

“We expect this bill will be the starting point for debate next year regardless of which party controls the House or the Senate,” wrote Jaret Seiberg, an analyst with Cowen Washington Research Group. 

Seiberg added:

“What does matter is that there is a bipartisan effort to bring crypto into the existing regulatory regime even if the details are likely to change.”

Why Regulation is Necessary 

The senators said the bill plans to provide certainty and clarity to crypto markets, alongside consumer protections.

Furthermore, the bill would establish new rules for “stablecoins,” which are tokens intended to have their value pegged to a traditional asset like the U.S. dollar. It is no surprise that those products have been under significant pressure lately after a crash in the value of a high-profile stablecoin, TerraUSD.

The new bill would require stablecoin issuers to maintain high-quality liquid assets equal to the value of all outstanding stablecoins, and public disclosures of those holdings.

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