Bipartisan Lawmakers Seek Regulatory Clarity with New Digital Assets Bill

By: Eva Baxter

In a significant move towards enhancing the regulatory framework for digital assets in the United States, lawmakers have introduced the Digital Asset Market Clarity Act. Initiated by House Financial Services Committee Chairman, French Hill, on May 29, this bipartisan legislation aims to position the U.S. as a leader in the digital asset space. The bill proposes a coherent federal structure, classifying digital assets under defined categories such as "digital commodity," "investment-contract asset," and "permitted payment stablecoin," among others.

The 249-page measure strives to distinguish between securities and commodities within the realm of digital assets, a topic that has long been a subject of debate. If passed, the legislation will amend existing laws including the Securities Act and the Exchange Act to incorporate these new definitions. It offers a safe harbor period for primary token offerings that meet certain criteria, providing clarity to market participants regarding regulatory compliance. In particular, it stipulates that digital commodities trading, brokerage, and custody will fall under the exclusive oversight of the Commodity Futures Trading Commission (CFTC), with specific provisions for hybrid products involving securities.

The bill's bipartisan nature is underscored by support from key lawmakers, including Chairman of the Agriculture Committee G.T. Thompson, House Majority Whip Tom Emmer, and several Democratic co-sponsors. This bipartisan endorsement emphasizes the legislation's importance in safeguarding consumer interests while fostering innovation within the sector. Co-sponsors hail the legislation as a necessary step for defining clear regulatory roles between the Securities and Exchange Commission (SEC) and the CFTC, thereby resolving jurisdictional ambiguities that have previously hindered market efficiency.

The proposed legislation follows prior discussions and roundtables with industry experts and aims to fill regulatory gaps that have been identified over the years. The House Financial Services and Agriculture committees plan to discuss and mark up the bill jointly, before advancing it to the full House for a vote. This initiative not only seeks to streamline regulatory oversight but also reinforces the United States' commitment to maintaining its competitive edge in the rapidly evolving digital asset industry.