Introduction of the BRIDGE Digital Assets Act
Congressman John Rose has introduced a significant piece of legislation aimed at simplifying the regulatory framework for digital assets. This initiative involves the establishment of a Joint Advisory Committee, which will be co-managed by the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).
Aims of the BRIDGE Digital Assets Act
The BRIDGE Digital Assets Act is designed to promote cooperative efforts between the SEC and CFTC to craft critical policies related to digital assets.
Addressing Regulatory Confusion
Both regulatory bodies have indicated their interest in overseeing the digital asset sector, given their differing views on the classification of cryptocurrencies. Some are considered commodities, while others are viewed as securities. This ambiguity contributes to considerable regulatory uncertainty in the United States.
Statement from Congressman John Rose
“The United States must provide a future where digital assets can thrive… The current heavy-handed, regulation-by-enforcement approach isn’t working and is instead encouraging investment in this key innovation overseas.”
Functions of the Joint Advisory Committee
The newly proposed committee will have the responsibility to advise both the SEC and CFTC on regulatory guidelines pertinent to digital assets. Areas of focus include:
- Decentralization
- Functionality
- Information asymmetries
- Network security
The ultimate goal of the BRIDGE Digital Assets Act is to establish a cohesive regulatory framework to replace the currently fragmented and often contradictory regulations surrounding digital assets. This alignment is expected to bolster blockchain technology’s potential to enhance financial markets.
Blockchain Technology’s Benefits
The advisory committee will investigate how blockchain and distributed ledger technologies can:
- Reduce transaction costs
- Increase transparency
- Improve customer protections, including the security of funds
- Make financial services more accessible
Committee Structure and Responsibilities
The Joint Advisory Committee will comprise at least 20 members from non-governmental organizations, split evenly between appointments from the CFTC and SEC. This diverse group will include:
- Digital asset issuers
- Registered participants in relevant activities
- Academic researchers
- End-users of digital assets
These committee members will not receive compensation; however, they will be reimbursed for travel expenses incurred while attending meetings. The legislation stipulates that the advisory committee will convene a minimum of twice a year and must relay its findings and recommendations to both regulatory agencies, which are obligated to issue a public response within three months.
Implementation Timeline
The BRIDGE Digital Assets Act sets forth a clear timeline for its execution:
- Joint charter adoption by the CFTC and SEC within 90 days of enactment
- Member appointments completed within 120 days
- First committee meeting to be held within 180 days
