The House of Representatives has passed a bill that aims to get the SEC and CFTC working together on digital asset rules.
The Eliminate Barriers to Innovation Act of 2021 passed the House on April 20. Ranking Member Patrick McHenry (R-NC) first introduced the bill to the Financial Services Committee in March. Stephen Lynch (D-MA), one of the leaders of the FSC's Fintech Task Force, cosponsored.
The Eliminate Barriers to Innovation Act is, at this point, one of the first bills explicitly addressing digital assets to have left the committee stage and passed one of Congress' two chambers. Its central focus is the relationship between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
If passed, the law would mandate the creation of a joint working group of non-government employees who would, in turn, advise both commissions and ultimately come up with a report and recommendations as to how the two should address digital assets markets. In its current form, the bill cautions that that working group's findings "may only relate to the laws, regulations, and related matters that are under the primary jurisdiction of the Securities and Exchange Commission or the Commodity Futures Trading Commission."
The SEC and CFTC have struggled to parse which cryptocurrencies to define as securities and which to define as commodities for years. The issue is at the heart of high-profile cases like the SEC's prosecution of Ripple over the issuance of XRP, which the firm claims to be a commodity and therefore outside of the SEC's purview.
A member of Representative McHenry's staff did not respond to The Block's request for comment by press time.