U.S. Reps. Patrick McHenry (R-NC) and Stephen Lynch (D-MA) introduced legislation that would require the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to establish a digital asset working group.
The Eliminate Barriers to Innovation Act, H.R. 1602, aims to ensure collaboration between regulators and the private sector to foster innovation.
“Innovators across the country are leading the way on financial technology — Washington needs to keep up,” McHenry, Republican leader of the House Financial Services Committee, said. “Establishing this working group is an important step to provide necessary regulatory clarity. By ensuring increased collaboration we can create an environment that encourages innovation, rather than holding it back. Digital assets have untold potential benefits for consumers, American businesses, and our standing as a world leader in developing these technologies. This working group will provide insight into how we can work with innovators to unleash these benefits.”
The working group would consist of appointees from the SEC as well as representatives from financial technology companies, financial firms, and small businesses, among others.
The working group would produce a report that analyzes the domestic regulatory framework and the developments in other countries relating to digital assets. Further, it would request insight into best practices to reduce fraud, protect investors, and assist in compliance with obligations under the Bank Secrecy Act.
Lynch said the bill would foster collaboration between the SEC and the CFTC and Congress that would help create fair and transparent markets.
“Digital assets have the potential to make transactions more efficient, increase inclusion across our financial system and raise capital for small businesses,” Lynch, chair of 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.”