US House of Reps passes legislation to make crypto rules clear
The Congress is advancing with its efforts to better the crypto landscape in the US
The US House of Representatives yesterday passed the Eliminate Barriers to Innovation Act that seeks to make regulations in the crypto industry more clear. The legislation is now pending approval from the Senate and the final okay from President Joe Biden. If given the green light by both parties, it will soon become law.
The legislation was introduced by the North Carolina representative, Patrick McHenry. The Eliminate Barriers to Innovation Act will clarify the rules differentiating cryptocurrencies categorised as commodities or securities.
“#BREAKING: The House just passed 6 bipartisan Financial Services bills, including Ranking Member @PatrickMcHenry’s Eliminate Barriers to Innovation Act,” the Committee on Financial Services shared on Twitter.
The blurred lines around crypto classification has caused legal trouble in the past, with Ripple Labs being a perfect example. The FinTech firm is currently battling with the Securities and Exchange Commission (SEC) over the native token on its platform, XRP, and whether it should be classed as a security or not. Towards the end of last year, the Executive Chairman Chris Larsen revealed that the company was considering a move outside the US to a country with clearer and friendlier regulations.
“The whole tenor continues to be one of frustration that we don’t have more clarity and we don’t have more of a pro-US approach,” he said at the time.
The legislation will attempt to bridge the SEC and Commodity Futures Trading Commission by bringing them together into a collective group; alongside watchdog groups, firms in the virtual assets niche, financial companies under the umbrella of the agencies, and academics. It will also seek to provide solutions to some of the issues and concerns regarding crypto regulations.
According to the legislation, the group is tasked with evaluating the existing crypto rules within 12 months. It will then report back with answers to different inquiries, such as how regulations impact the crypto markets, if laws are affecting the country’s competitiveness and how crypto markets can be made transparent and efficient.
The group will also be expected to come up with recommendations on how fraud and price manipulation in the crypto sector can be curbed. This way, US investors and traders can be protected from exploits in the market. As it stands, many firms are pushing for regulation clarity, but discord will almost certainly arise on what scope these regulations should have.
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Sam Grant, Khareem Sudlow