The US government is actively working to regulate cryptocurrency through various bills in Congress and executive orders. These measures aim to create a comprehensive regulatory framework that fosters the industry’s growth while safeguarding consumers and investors.
A notable bill is the Responsible Financial Innovation Act of 2023, which proposes the establishment of a new regulatory agency called the Digital Asset Regulatory Agency (DARA). DARA’s role would be to oversee and regulate cryptocurrency exchanges, ensuring compliance and preventing illegal activities.
Another critical legislation is the Stablecoin Innovation and Protection Act of 2023, which seeks to create a regulatory framework for stablecoins. This type of cryptocurrency is backed by real-world assets like the US dollar, and the bill aims to impose registration and financial requirements for stablecoin issuers.
Additionally, President Biden’s executive order in March 2022 urged the development of a comprehensive regulatory framework for the cryptocurrency industry. The government also plans to assess potential risks and benefits associated with cryptocurrency to provide recommendations for risk mitigation.
The proposed legislation addresses key aspects of cryptocurrency regulation. It clarifies whether a cryptocurrency is considered a security or a commodity, streamlining compliance for businesses. Furthermore, it introduces oversight for stablecoins, ensuring market stability and transparency to protect consumers from fraud.
In an effort to enhance oversight, the bills require cryptocurrency exchanges to register with the SEC, providing greater investor protection.