Lawmakers in the United States have reintroduced a bill to prevent the loss of innovation in the wake of an ongoing crypto regulation crackdown on the industry. This effort is being seen as a pro-Crypto move to nurture the underlying technology and innovation it offers.
Recently, Representatives Patrick McHenry and Ritchie Torres have revived a bill to fix digital asset reporting requirements. The lawmakers have reintroduced the Keep Innovation in America Act, which was first introduced in March 2021. Sources suggest that the lawmaker duo has reintroduced the bill in the wake of the regulatory war on crypto that threatens to send talent overseas.
Earlier this week, Patrick McHenry, Chairman of the House Financial Services Committee had issued a stark warning to the US authorities for having such a stringent approach. He said that America could either cement its position as the leader of the global financial system or it can allow this wave of innovation to pass by. Reportedly, the reintroduced bill aims to change the reporting requirements for crypto industry participants under current legislation.
McHenry had also criticized the ongoing regulatory approach and the prevalent laws in the country and found them responsible for chasing the technology and businesses around it abroad. He stated:
As it stands, the current law will hinder the development of digital assets and their underlying technology in the United States, shifting its development outside the United States. Unfortunately, misguided policy and regulatory overreach threaten to push this dynamic industry—and its potential benefits—overseas.
Torres, who has partnered with McHenry in reintroducing the innovation bill, echoed the former’s sentiment. He said that the proposed legislation which has received support from several notable personalities will be fairly helpful in placing the US as a global leader in the evolving technology. In his words:
This common-sense legislation, which has earned the support of key industry and market participants, brings digital asset reporting requirements in line with the current ecosystem and offers much-needed legal and regulatory clarity to help cement our continued place as the global leader in crypto technology and innovation.
Usually, the lawmakers in the US have been found to be divided over most of the topics concerning crypto but there has been supporting for the proposed bill from both sides. The co-signers include Congressmen Warren Davidson, Tom Emmer, Eric Swalwell, Ro Khanna, and Darren Soto. Additionally, French Hill, Digital Assets and Fintech Subcommittee Chair extended his support.
In the US, several notable figures have raised caution over the regulator’s approach to cryptocurrencies. Last week, McHenry and Senator Cynthia Lummis criticized the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin (SAB) 121, which provides guidance on accounting treatment for digital assets. They argued that the guidelines, which became effective in April 2022, will discourage regulated entities from engaging in digital asset custody, placing customer assets at greater risk of loss.
Notably, Hester Peirce, Commissioner of the Securities and Exchange Commission (SEC) has urged the regulator to turn to Congress in its stablecoin drive. She said that Congress was “actively considering the issue” adding that the SEC and other financial regulators could hold public roundtables pending results from the legislators. She also said that the regulators can’t draft rules using enforcement actions.
It is important to see what twists the regulatory feud in the US is going to take place. The two major regulators i.e. SEC and the Commodity Futures Trading Commission (CFTC) have been in strife for ages regarding the regulation of cryptocurrencies. However, SEC’s enforcement-oriented approach has been found to be largely problematic.