US Lawmaker Proposes Bill to Create SEC-CFTC Advisory Committee on Digital Assets

Highlights:

• The new bill aims to create a Joint Advisory Committee between the SEC and CFTC for crypto regulations.
• The committee will also include 20 non-governmental members, offering guidance on digital asset policies.
• It will also explore blockchain technology’s potential to enhance transparency, reduce costs, and improve security.

On Sept. 12, Tennessee Congressman John Rose, a member of the Financial Services Committee, proposed a new bill titled the “Bridging Regulation and Innovation for Digital Global and Electronic Digital Assets Act” or the “BRIDGE Digital Assets Act.” The bill aims to establish a Joint Advisory Committee on Digital Assets, with representatives from both the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

SEC-CFTC Advisory Committee to Harmonize Digital Asset Regulations

The Joint Advisory Committee will guide rules, regulations, and policies related to digital assets. The bill aims to foster regulatory harmonization between the SEC and CFTC, which currently manage different facets of cryptocurrency regulation. The proposed committee will focus on quantifying various aspects of digital assets, such as decentralization, functionality, and security. Congressman Rose also noted that the current “regulation-by-enforcement” approach is ineffective and is driving innovation and investment overseas.

Rose said:

“The Joint Advisory Committee on Digital Assets will provide a framework for the government and private sector partners to cooperate on a path toward success for the regulatory landscape of digital assets and private sector participants.”

Beyond regulatory harmonization, the BRIDGE Digital Assets Act emphasizes the potential of blockchain technology to enhance financial markets. The committee will explore how blockchain and distributed ledger technologies can increase transparency, lower transaction costs, and boost customer protections, including enhanced security for customer funds and more accessible financial services.

Bill Proposes Adding 20 Non-Governmental Members to Committees

The committee will have at least 20 nongovernmental members, equally selected by the CFTC and SEC. These members will include digital asset issuers, registered participants in digital asset activities, academic researchers, and digital asset users. They will advise the agencies on their crypto rules, regulations, and policies.

Members will serve without compensation but will be reimbursed for travel expenses incurred for committee meetings. The bill requires the committee to meet at least twice annually and submit its findings and recommendations to both regulatory agencies, which must provide a public response within three months.

The bill establishes a clear timeline for implementation, requiring the CFTC and SEC to adopt a joint charter for the committee within 90 days of the bill’s enactment. The agencies must also appoint members within 120 days and hold the committee’s first meeting within 180 days.

🚨SCOOP: Republican Tennessee Congressman @RepJohnRose, who sits on the @FinancialCmte, is introducing a new bill called the “BRIDGE Digital Assets Act” that would establish a Joint Advisory Committee on digital assets between the @SECGov and the @CFTC.

The purpose of the…

— Eleanor Terrett (@EleanorTerrett) September 12, 2024

BRIDGE Digital Assets Act to Address Crypto Regulation Discrepancies

The BRIDGE Digital Assets Act addresses rising frustration in the crypto industry over the uncertainty and inconsistency in digital asset regulation. The SEC and CFTC have frequently disagreed on jurisdiction, with the SEC classifying some cryptocurrencies as securities while the CFTC considers them commodities.

Thus, the Joint Advisory Committee is designed to bridge this regulatory gap. It will help align the agencies on crucial policies. Rose stated that the committee seeks to foster a more collaborative approach to crypto governance. He also noted that the joint committee will support cooperation to advance the success of the crypto regulatory framework.