In a recent interview with CNBC, Faryar Shirzad, Chief Policy Officer at Coinbase, explained why he was optimistic about the crypto regulatory outlook in the U.S.
Shirzad said that he could see crypto legislation “fairly quickly” getting passed in the U.S. Congresses — both chambers of which are controlled by the Republicans — once Donald Trump gets in the White House.
He told CNBC at a crypto event in London last week:
“We have the most pro-crypto Congress ever [in] history, we have an extraordinarily pro-crypto president coming into office… I think the combination should finally allow the 50 million Americans who own crypto to have their interests and voice heard in policy.“
Two pieces of crypto legislation that Shirzad was presumably talking about are the Financial Innovation and Technology for the 21st Century Act (FIT21) and the Clarity for Payment Stablecoins Act of 2024.
FIT21 is a significant legislative effort aimed at creating a comprehensive regulatory framework for digital assets in the United States. Passed by the U.S. House of Representatives on May 22, the bill seeks to delineate the responsibilities of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) concerning digital commodities and securities, respectively. By defining key terms such as “digital asset” and “digital commodity,” FIT21 aims to provide regulatory clarity and foster innovation while ensuring consumer protection.
The bill mandates that digital asset brokers, dealers, and trading systems register with either the SEC or CFTC, depending on their classification, and adhere to specific disclosure requirements. It also establishes a joint advisory committee between the CFTC and SEC to guide digital asset regulation. Despite its passage in the House, FIT21 faces challenges in the Senate, particularly due to opposition from the Biden administration, which argues that it lacks adequate consumer safeguards.
As for the Clarity for Payment Stablecoins Act of 2024, which introduced by Senator Bill Hagerty, it aims to establish clear regulatory guidelines for fiat-backed stablecoins. This legislation proposes that stablecoin issuers must back their digital currencies with real assets on a one-to-one basis, ensuring transparency and stability in the market. It distinguishes between smaller issuers, who can operate under state regulations if they issue less than $10 billion in stablecoins, and larger issuers, who require federal oversight.
The bill assigns regulatory responsibilities to different government agencies: the Federal Reserve is tasked with overseeing banks issuing stablecoins, while non-bank issuers fall under the jurisdiction of the Office of the Comptroller of the Currency (OCC). Furthermore, it mandates monthly reserve disclosures by issuers to enhance transparency and protect consumers by keeping customer funds separate from issuer assets. Feedback on this draft is being collected, indicating ongoing discussions about its provisions before potential enactment.
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