Proposed Bill Aims to Bridge SEC-CFTC Divide on Crypto Regulation
In a move that could reshape the landscape of digital asset regulation in the United States, Representative John Rose (R-TN) has introduced the “Bridging Regulation and Innovation for Digital Global and Electronic Digital Assets Act,” or the “BRIDGE” Digital Assets Act. The bill proposes the creation of a joint committee between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to study and advise on digital asset regulations.
The proposed Joint Advisory Committee on Digital Assets would comprise 20 non-governmental stakeholders representing various interests in the digital asset space. These members, serving two-year terms, would meet at least twice annually to provide input on rules, regulations, and policies related to cryptocurrencies and blockchain technology.
Rep. Rose, a member of the House Financial Services Committee, criticized the current regulatory approach as ineffective. “The current heavy-handed, regulation-by-enforcement approach isn’t working and is instead encouraging investment in this key innovation overseas,” Rose stated. He emphasized that the committee would provide a framework for cooperation between government and private sector partners to develop a more conducive regulatory landscape for digital assets.
The bill comes at a time when the SEC and CFTC have diverged on several crypto-related issues, including the classification of certain cryptocurrencies like Ethereum. While SEC Chair Gary Gensler has been ambiguous about Ethereum’s status, CFTC Chair Rostin Behnam has categorically stated that ETH is a commodity falling under CFTC oversight.
The proposed committee would explore various aspects of the digital asset ecosystem, including:
- Decentralization and its implications
- Methods to increase efficiency in financial markets
- Consumer protection measures
- Harmonization of laws and regulations between the SEC and CFTC
Industry experts view the bill as a potential step towards regulatory clarity. The inclusion of digital asset issuers and users on the committee could provide valuable insights into the practical implications of proposed regulations.
However, the bill’s path forward remains uncertain. While it may receive support in the House Financial Services Committee, partisan disagreements have hindered previous attempts to advance digital asset legislation in Congress.
The BRIDGE Digital Assets Act is not the first attempt to standardize crypto regulations in the U.S. In May, the House of Representatives passed a bipartisan bill proposing shared regulatory powers between the SEC and CFTC. Although the White House objected to that bill, it expressed willingness to negotiate on digital asset legislation.
As the U.S. grapples with how to regulate the rapidly evolving crypto industry, the proposed joint committee could provide a platform for more collaborative and informed decision-making. Whether this approach will lead to a more innovation-friendly regulatory environment remains to be seen, but it represents a significant shift in the ongoing dialogue between regulators, lawmakers, and the digital asset industry.
