Congressman John Rose has introduced a new bill to streamline regulation of digital assets by creating a joint advisory committee jointly managed by the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).
Introduced in the House of Representatives, the BRIDGE Digital Assets Act aims to promote cooperation between the two agencies on key policies surrounding digital assets.
Both regulators have expressed a desire to oversee the sector based on their respective views that some cryptocurrencies are commodities while others are securities. However, the lack of clarity on this issue is one of the main causes of regulatory uncertainty in the US.
Rose said:
“The United States must provide a future where digital assets can thrive… The current heavy-handed approach to regulation through enforcement is not working and is instead encouraging investment in this important innovation abroad.”
Joint Advisory Committee
The advisory committee will be charged with advising both the SEC and the CFTC on rules and regulations for digital assets. It will focus on key aspects of the digital asset space, including decentralization, functionality, information asymmetries and network security.
The bill aims to create a unified framework for digital assets, which currently operate under fragmented and sometimes conflicting regulations, by aligning the two watchdogs’ regulatory approaches.
In addition to regulatory harmonization, the BRIDGE Digital Assets Act highlights the potential of blockchain technology to improve financial markets.
The committee will explore how blockchain and distributed ledger technologies can reduce transaction costs, provide greater transparency and improve customer protections, such as improved security of customer funds and more accessible financial services.
Timeline and details
The committee will consist of at least twenty non-governmental members, appointed equally by the CFTC and the SEC. Stakeholders include issuers of digital assets, registered participants in activities related to digital assets, academic researchers and users of digital assets.
These members do not receive any compensation, but they do receive reimbursement for travel expenses in connection with committee meetings. The bill requires the commission to meet at least twice a year and provide its findings and recommendations to both regulatory agencies, which must respond publicly within three months.
The bill establishes a clear timeline for implementation and directs the CFTC and the SEC to adopt a joint charter for the commission within 90 days of the bill’s enactment. In addition, agencies must appoint members within 120 days and convene the first meeting of the commission within 180 days.
