Bitcoin (BTC) and Ethereum, along with other top cryptocurrencies Ripple’s XRP and Binance’s BNB, have experienced a significant surge in value this year, contributing a staggering $350 billion to the cryptocurrency market in 2023. This remarkable growth has sparked a wave of bullish predictions within the industry.
Although the price of Bitcoin experienced a slight setback last month after reaching its peak of just over $30,000 in 2023, this decline had a knock-on effect on Ethereum, XRP, and BNB. In the midst of this market volatility, both Goldman Sachs and Microsoft have been quietly laying the groundwork for the next bullish phase.
However, concerns are growing that the current crypto landscape may be a “powder keg” waiting to explode. To address this issue, lawmakers in the United States have introduced a “functional framework” aimed at providing regulatory clarity for Bitcoin and other cryptocurrency companies operating within the country.
The proposed bill, consisting of 162 pages, was revealed by Republican representatives Patrick McHenry from North Carolina, the chair of the House Financial Services Committee, and Glenn Thompson from Pennsylvania, the chair of the House Agriculture Committee. Their objective is to stimulate discussions between Republicans and Democrats on the two committees, as reported by Bloomberg.
In recent weeks, prominent U.S.-based cryptocurrency companies have expressed concerns that the country is falling behind in terms of crypto legislation compared to other jurisdictions. This sentiment was further emphasized by the enforcement of Hong Kong’s new regulatory regime and the European Union’s enactment of the landmark Markets in Crypto Assets (MiCA) regulation.
Leading crypto exchanges, including the Nasdaq-listed Coinbase, have been engaged in regulatory disputes over the classification of certain cryptocurrencies as unregistered securities. In late 2020, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple, accusing the company of selling $1.3 billion in unregistered securities through its XRP cryptocurrency. Ripple’s CEO has recently expressed confidence in an imminent resolution to this matter.
The new U.S. crypto bill represents several attempts to pass comprehensive cryptocurrency legislation in previous sessions. It proposes that cryptocurrencies offered as part of an investment contract would fall under the oversight of the SEC, while those qualifying as commodities would be regulated by the Commodity Futures Trading Commission (CFTC). Whether a cryptocurrency is considered a security or commodity would be determined by the level of decentralization of its underlying blockchain, subject to an SEC ruling.
The bill has been met with enthusiasm from various stakeholders within the Bitcoin and crypto industry, especially in light of the upcoming House Agriculture Committee hearing on digital asset regulation scheduled for June 6. Paul Grewal, Chief Legal Officer at Coinbase, took to Twitter to praise the bill, stating that it establishes a solid foundation for regulatory jurisdiction and definitions. He also mentioned that a thorough review of the bill is necessary, but the initial impressions are encouraging.
Today’s market regulation bill from @PatrickMcHenry and @CongressmanGT lays a strong foundation for regulatory jurisdiction and definitions, BD rules, and consumer protections. I’m eager to share more on this next Tuesday before the @houseaggop. 1/3 https://t.co/g9qceFwmcS
— paulgrewal.eth (@iampaulgrewal) June 2, 2023
Ryan Selkis, the founder of crypto data company Messari, expressed his optimism, acknowledging that it is a significant achievement for the crypto industry to gain attention in Washington, D.C., this year, considering the setbacks experienced in the previous year. Selkis emphasized the need for further work to develop a viable piece of legislation, but regarded the bill as a positive starting point toward establishing a sensible market structure.
1/ BIG NEWS:
A new market structure bill just dropped in Congress. It’s a win this year for crypto to even get some attention in DC right now, after last year’s setbacks.
What this means 👇
— Ryan Selkis 🪳 (@twobitidiot) June 2, 2023
In conclusion, the introduction of this groundbreaking crypto bill by Congress marks a significant step toward providing regulatory clarity for the cryptocurrency industry in the United States. With the growing interest and support from key industry players, there is hope that a well-structured and comprehensive legislation will be developed to address the evolving needs of the crypto market.
