#USHouseMarketStructureDraft

The US House of Representatives has released a Digital Asset Market Structure Discussion Draft aimed at establishing a clear regulatory framework for cryptocurrencies. This initiative, spearheaded by key members of the House Financial Services and Agriculture Committees, seeks to protect consumers, promote innovation, and solidify America's leadership in the digital asset space.

Key aspects of the draft include:

* Clear Division of Regulatory Roles: The draft aims to delineate the responsibilities of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The CFTC would have primary jurisdiction over digital commodity spot markets through a new category of regulated entities.

* Definition of Digital Commodities: The bill seeks to clarify that transactions involving the sale of digital commodities are not classified as securities, provided they don't grant ownership in the issuer's business or profits.

* Decentralization Test: A key component involves a clear test for decentralization. Assets deemed fully decentralized would be classified as commodities under the CFTC.

* Stablecoin Clarity: The draft defines stablecoins without categorizing them as securities, providing much-needed clarity for this growing area.

* Custody Requirements: It introduces the concept of qualified digital commodity custodians with stringent oversight to protect customer assets.

* DeFi Exemptions: Non-custodial DeFi protocols that don't exercise discretion over user funds would be exempt.

* Optional Early Registration: The bill proposes an optional early registration path for issuers.

* Joint Rulemaking: It emphasizes the need for collaboration between the SEC and CFTC in regulating the digital asset space.

A joint hearing was scheduled for May 6th to discuss the draft. However, initial reports suggest the hearing devolved into partisan disagreements. Despite this, the release of the draft is seen as a significant step towards providing regulatory clarity for the US crypto market.