Congressman John Rose of Tennessee introduced the “BRIDGE Digital Assets Act”, one of the most significant bills changing the regulatory landscape for crypto assets in the United States.
It establishes a Joint Advisory Committee made up of participants from the Securities and Exchange Commission and the Commodity Futures Trading Commission. It would therefore seek to harmonize the sometimes conflicting regulations that currently exist between the two agencies for digital assets, which fall under both securities and commodities jurisdictions.
Rose argues that the “regulation by enforcement” approach stifles innovation and encourages investment abroad, requiring the United States to create a more environmentally friendly climate for digital asset development.
🚨 NEW: I introduced the BRIDGE Digital Assets Act to create a joint advisory committee on digital assets between the @SECgov And @CFTC.
The United States must allow digital assets to flourish because the heavy-handed approach of regulation through enforcement is not working. https://t.co/Ty0VpvPgoj
— Congressman John Rose (@RepJohnRose) September 12, 2024
Role of the Joint Committee
It proposes a composition for the Joint Advisory Committee that should consist of at least 20 private sector participants, including digital asset issuers, academic researchers and users. They would be able to provide insights and recommendations on digital asset regulation with regard to aspects such as decentralization, functionality and security.
The committee is expected to meet at least twice a year, with findings and recommendations mandated to be made and given to both the SEC and CFTC. This collaborative approach could bridge the regulatory gap to create a more cohesive approach to regulating digital assets, benefiting both consumers and investors.
As of today, the market cap of cryptocurrencies stood at $2.05 trillion. Chart: TradingView.com
Addressing Gaps in Crypto Regulation
One of the key features of the BRIDGE Digital Assets Act is that it aims to address the confusion at the current regulatory level. Both the SEC and CFTC interpret digital assets differently, creating confusion among businesses and investors.
🚨SCOOP: Republican Congressman from Tennessee @RepJohnRosethat on the @FinancialCmteintroduces a new bill called the “BRIDGE Digital Assets Act” that would establish a joint advisory committee on digital assets between the @SECGov and the @CFTC.
The purpose of the…
—Eleanor Terrett (@EleanorTerrett) September 12, 2024
The bill calls for a joint commission in which the two agencies will further align their regulatory frameworks for cooperation and clarity. The crux of the matter is that the alignment provides an opportunity for a harmonized approach to regulating digital assets, which, if realized, would increase customer protection, disclosure and savings in transaction costs.
Future implications
The BRIDGE Digital Assets Act could be a major change in the way digital assets are regulated in the United States. It also sets a specific timeline for updating the law: the agencies, the SEC and CFTC, will adopt a joint charter to provide for the commission within 90 days and will appoint the commission’s members within 120 days, with the first meeting expected to take place within 180 days of enactment.
This structured approach not only establishes a framework for improving regulatory practices, but also points to new innovation in the digital asset space. As the crypto industry continues to evolve, the BRIDGE Act may be the key to unlocking such a balance between regulation and innovation, one that will ultimately benefit the U.S. economy and its positioning in the global digital asset landscape.
Main image from Built In, chart from TradingView