They want the U.S. government to gain a better grasp of the rapidly emerging landscape of virtual currencies, smart contracts and other commodities.
New House legislation would require the Commodity Futures Trading Commission and the Securities and Exchange Commission to jointly create and steer a digital asset working group.
Introduced last week by Reps. Patrick McHenry, R-N.C., and Stephen Lynch, D-Mass., the Eliminate Barriers to Innovation Act calls for such a team to help promote innovation-pushing collaboration between U.S. regulators and the private sector.
“Innovators across the country are leading the way on financial technology—Washington needs to keep up,” McHenry, the Republican leader of the House Financial Services Committee, said in a statement. “Establishing this working group is an important step to provide necessary regulatory clarity.”
Though the bill doesn’t explicitly define “digital asset,” the extremely broad term was recently deemed by the CFTC to be anything “that can be stored and transmitted electronically, and has associated ownership or use rights.” They could include currencies, securities or commodities—and owners of such can shift through digital trading.
If the legislation passes, an equal number of employees from each of the commissions would participate in the newly proposed working group, as would representatives from financial technology companies and small businesses, among others. Specifically, those involved would produce a report analyzing the U.S.’ legal and regulatory framework relating to digital assets and developments made by other countries in this realm.
Recommendations to reduce fraud and manipulation, promote cybersecurity, protect investors—and more—would also be expected.
“Digital assets have the potential to make transactions more efficient, increase inclusion across our financial system and raise capital for small businesses,” Lynch, who chairs the Financial Technologies Task Force, said. “As this technology continues to develop and deploy, it is extremely important that we consider the possible vulnerabilities that the wider adoption of digital assets might present while addressing the lack of clarity in the regulation of these financial instruments to mitigate potential harms that may occur.”
The bill was referred to the Financial Services and Agriculture committees.