We need guidance for the growing cryptocurrency market

The crypto and blockchain sectors have enormous potential for economic growth and technological advancement. To fully realize the sector’s potential, we must establish regulatory clarity to ensure consumer protection and that the industry operates within ethical and legal boundaries.

Although the United States has been slow to adopt meaningful regulation in this area, we are seeing increasing bipartisan recognition of the need for regulatory clarity around digital assets. The House of Representatives, with bipartisan support, passed the Financial Innovation and Technology for the 21st Century Act (FIT21), a bill that would establish a market structure for regulating digital assets. Additionally, the bipartisan House and Senate passed a resolution to overturn the over-regulation of the Securities and Exchange Commission’s accounting guidelines due to concerns about their harmful impact on consumers and financial institutions. This bipartisan support underscores the importance and necessity of FIT21 to provide clear rules and standards for this emerging industry.

There are several key areas where regulation is critical to the cryptocurrency and blockchain industry.

Above all, consumers need to be protected. Cryptocurrencies and transactions can be complex, making them susceptible to fraud. Rules that protect consumers from fraud will ensure that this new sector can be used with confidence for legitimate purposes.

Second, a clear demarcation between the SEC and the Commodities Futures Trading Commission is necessary to create a streamlined and effective regulatory environment that supports innovation and regulatory certainty in the digital asset space. The Act’s provisions on registration, compliance, and oversight help enhance market integrity by ensuring that digital asset exchanges and custodians operate to sound—that is, clear—standards. In addition to protecting individual consumers, regulations that support cybersecurity more broadly will ensure that users and institutions are protected from cyberattacks when using this new technology.

FIT21 and the regulations it outlines are not just about regulation; they are a critical part of keeping America globally competitive in this new sector. A strong framework of clear and well-established regulations will not only protect consumers and institutions, but will also attract talent and investment to our country. This, in turn, will support continued innovation and entrepreneurship, supporting jobs and growth in America.

To realize these benefits, the FIT21 Act must cross the finish line, and the next step is for the Senate to pass it. I hope Minnesota Senators Tina Smith and Amy Klobuchar will recognize the benefits of cryptocurrencies and blockchain technology and support the FIT21 Act. This legislation will ensure that America remains a leader in technological innovation.

Alexander Cutchey is the Government Affairs Manager at Marathon Digital Holdings in St. Cloud.

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