The U.S. Senate has taken another step toward establishing clear regulations for the cryptocurrency sector. Led by Senator Tim Scott, the Senate Banking Committee has released a set of core principles for the upcoming CLARITY Act, aimed at defining rules for digital assets, enhancing investor protections, and modernizing the approach of regulatory bodies.
💼 Aiming for a Clear Legal Framework
The newly released principles, published by the Subcommittee on Digital Assets, are intended to guide the development of the actual legislative text. A top priority for lawmakers is to clearly distinguish between digital asset securities and digital asset commodities, ensuring legal certainty across the crypto industry.
🧭 Dividing Responsibilities Among Agencies
One of the central elements is the division of regulatory authority between key institutions—primarily the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Instead of creating a new all-powerful regulator, the law would assign responsibilities based on asset types.
⚙️ Modernizing Rules for the Digital Era
The Senate also aims to update outdated financial rules to reflect technological advancements like blockchain. The SEC would gain new powers to oversee digital fundraising more flexibly, and registration requirements for crypto startups could be simplified.
🔒 Protecting Investors and Preventing Financial Crime
The upcoming law is expected to safeguard customer funds during crypto firm bankruptcies, impose new risk-management and registration requirements on centralized platforms, and establish clear anti-money laundering and sanction compliance rules for digital assets.
🚀 Encouraging Innovation and Crypto Access for Banks
The CLARITY Act will also push federal agencies to foster innovation by providing clear guidelines that confirm banks and financial institutions are permitted to engage in crypto-related activities.
A promising development is that the Federal Reserve has already taken the first step by removing the "reputational risk" factor that previously discouraged banks from working with crypto firms.
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