New Crypto Legislation Promises Regulatory Clarity in the U.S.

U.S. senators revealed draft legislation aimed at establishing a regulatory framework for cryptocurrency to provide clarity over regulatory jurisdiction, potentially aiding digital asset adoption. The proposed law identifies the status of crypto tokens, empowers the CFTC, accommodates banking concerns over stablecoins, and outlines clear disclosures alongside incentives for crypto activities.

Late on Monday, U.S. senators presented draft legislation that could shape the future of cryptocurrency regulation in the country. The proposed framework seeks to demystify which crypto tokens qualify as securities, commodities, or other financial instruments, providing long-sought legal clarity to the industry.

Additionally, the legislation plans to grant the U.S. Commodity Futures Trading Commission (CFTC) authority over spot crypto markets, aligning with industry preferences. For banks, the bill creates a federal regulatory framework for stablecoins, addressing concerns over interest paid by intermediaries that could impact financial stability.

While the bill prohibits crypto companies from paying interest solely for holding stablecoins, it allows rewards for activities like payments or loyalty programs. However, some industry insiders remain skeptical about the bill's progression into law, especially with impending election cycles potentially shifting Congressional focus.

(With inputs from agencies.)