U. S. senators recently proposed draft legislation to create a regulatory framework for cryptocurrency, aiming to clarify the jurisdiction of financial regulators and promote the adoption of digital assets. The crypto industry has long sought such legislation to resolve ongoing issues facing crypto companies. The bill would distinguish between crypto tokens as securities or commodities, offering much-needed legal clarity.
The proposal grants authority to the U. S. Commodity Futures Trading Commission (CFTC) to oversee spot crypto markets, which is favored by the industry over the U. S. Securities and Exchange Commission (SEC). The legislation also addresses concerns from the banking industry about legislation on stablecoins, suggesting a fix for a loophole that allowed intermediaries to pay interest on these assets, which banks fear could threaten financial stability by diverting deposits away from insured institutions.
Under the new bill, crypto companies will be prohibited from paying interest solely for holding stablecoins, but they can provide rewards for specific activities like payments or loyalty programs. A joint rule from the SEC and CFTC would require clear disclosures about rewards linked to stablecoin use.
The Senate Banking Committee will debate this bill soon, while the Senate Agriculture Committee works on its version. The House of Representatives previously passed its version, but Senate discussions stalled over differing views. With upcoming elections, some lobbyists are doubtful about the bill’s chances of becoming law, leaving crypto firms dependent on regulatory guidance that may change with future administrations.
With information from Reuters
