Congressman John Rose has proposed a new bill to streamline digital asset regulations by creating a Joint Advisory Committee co-managed by the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).
The BRIDGE Digital Assets Act, introduced in the House, aims to foster collaboration between the two agencies on key policies surrounding digital assets.
Both regulators have expressed a desire to supervise the industry based on their respective stances that some cryptocurrencies are commodities while others are securities. However, the lack of clarity on which is which has been one of the primary drivers of regulatory uncertainty in the US.
Rose said:
“The United States must provide a future where digital assets can thrive… The current heavy-handed, regulation-by-enforcement approach isn’t working and is instead encouraging investment in this key innovation overseas.”
Joint Advisory Committee
The advisory committee will be tasked with advising both the SEC and the CFTC on rules and regulations for digital assets. It will focus on key aspects of the digital asset space, including decentralization, functionality, information asymmetries, and network security.
The bill seeks to create a unified framework for digital assets, which currently operate under fragmented and sometimes conflicting regulations, by aligning the two watchdogs’ regulatory approaches.
In addition to regulatory harmonization, the BRIDGE Digital Assets Act highlights blockchain technology’s potential to improve financial markets.
The committee will explore how blockchain and distributed ledger technologies can reduce transaction costs, provide greater transparency, and enhance customer protections, such as improved security of customer funds and more accessible financial services.
Timeline and details
The committee will consist of at least 20 nongovernmental members, equally appointed by the CFTC and SEC. Stakeholders will include digital asset issuers, registered participants in digital asset-related activities, academic researchers, and users of digital assets.
These members will not receive compensation but will be reimbursed for travel expenses related to committee meetings. The bill mandates that the committee meet at least twice a year and provide its findings and recommendations to both regulatory agencies, which must respond publicly within three months.
The bill sets a clear timeline for implementation, mandating the CFTC and SEC to adopt a joint charter for the committee within 90 days of the bill’s enactment. Additionally, the agencies must appoint members within 120 days and convene the committee’s first meeting within 180 days.