Representative Don Beyer (D-VA) has introduced a bill that would create a far-reaching regulatory framework for digital assets.
The "Digital Asset Market Structure and Investor Protection Act" seeks to delineate the treatment of crypto assets under five securities acts, the Commodity Exchange Act and the Bank Secrecy Act, as well as Federal Reserve treatment of stablecoins and possible digital legal tender.
"Digital asset holders have been subjected to rampant fraud, theft, and market manipulation for years, yet Congress has hitherto ignored the entreaties of industry experts and federal regulators to create a comprehensive legal framework," said Beyer in a statement. "Our laws are behind the times, and my bill would start the long-overdue process of updating them to give digital asset holders and investors basic protections.”
Indeed, while other lawmakers have introduced legislation to codify digital assets' place in financial regulatory structures, Beyer's is seemingly the first to take on the reformation of so many agencies at once.
The bill would compel the SEC and CFTC to provide legal clarity for most of the digital asset market through a process of joint rulemaking. It would also add digital assets under "money instruments" in the BSA, which means crypto would be subject to already established anti-money laundering, record keeping and reporting standards.
Outside of already established agencies, it would create a Digital Asset Trade Repository where transactions that are not made public on a blockchain would be reported.
The proposed law also would put a big backstop for stablecoins in place, requiring any fiat-backed coin be approved by the Secretary of the Treasury prior to issuance. It won't grandfather in any projects, so existing dollar-pegged coins will have to apply for oversight like any new issuer.
"Not later than 90 days after the date of the enactment of this section, the Secretary of the Treasury shall establish an application process under which the Secretary may approve or disapprove a person wishing to issue a digital asset fiat-based stablecoin, under such terms and conditions as the Secretary determines necessary and appropriate," explained the bill.
In addition to creating oversight for dollar-pegged coins, the language of the bill empowers the Federal Reserve to issue its own digital dollar and distinguishes that existing, private dollar-pegged coins are not U.S. legal tender.
Since the start of the CBDC debate, many have discussed what role the Fed should play and if it requires an act of Congress to get started.
This bill would put that to rest by explicitly conferring that power. Lawmakers have already expressed concern over the U.S.'s place in the global stage's CBDC conversation. Many expressed concern that the U.S. could fall behind, especially in light of China's issuance of the digital yuan.