A plan to establish a new legal framework for digital currencies was approved by the US House of Representatives on Wednesday, in spite of an uncommon caution from the country’s securities regulator that it would lead to additional financial dangers.
By a bipartisan vote of 279 to 136, the Financial Innovation and Technology for the 21st Century Act, sponsored by Republicans, was approved. It’s unclear if the Senate will consider the proposal.
Supporters of the measure in the US Congress contend that it will assist foster the expansion of the business and offer regulatory clarity.
In an unexpected boost to the industry, the U.S. Securities and Exchange Commission (SEC) has indicated that it will probably approve applications for spot ether exchange-traded funds, coinciding with the House’s approval.
In a statement, SEC Chair Gary Gensler, meanwhile, expressed concern that the bill “would create new regulatory gaps and undermine decades of precedent regarding the oversight of investment contracts, putting investors and capital markets at immeasurable risk.”
Supporters of cryptocurrencies and business associations who have long seen Gensler’s SEC as a barrier to the broader adoption of digital assets have welcomed the bill.
Noting prominent indictments, fraud cases, bankruptcies, and failures, Gensler has argued that cryptocurrency regulations ought to be applied to digital assets just like any other.
He stated in the statement on Wednesday that the bill would prevent investors from receiving securities laws protection because investment contracts stored on a blockchain would no longer be considered securities.
Gensler pointed out that among other things, the measure would provide cryptocurrency investment contract issuers the ability to attest that their own goods are digital commodities exempt from SEC regulation, giving the agency an only sixty days to contest this claim.
