BlockBeats News, March 2nd, JPMorgan Chase analysts stated that the U.S. cryptocurrency market structure legislation may be approved by mid-year, with expectations of boosting the market in the second half of the year.
The proposed “CLARITY Act” aims to establish a digital asset classification framework, categorizing tokens as either “digital commodities” (regulated by the Commodity Futures Trading Commission) or “digital securities” (regulated by the Securities and Exchange Commission). The House of Representatives has advanced related bills, while the Senate is still in the negotiation stage. Key points of contention include:
Crypto companies hope to provide returns or reward mechanisms for stablecoins, while the banking industry is concerned that this move may lead to deposit outflows;
Democratic lawmakers are calling for strengthened conflict of interest restrictions, involving senior officials and their family members (including the President) regarding holdings and related party transactions.
Highlights of the bill include:
Establishment of a “grandfather clause,” allowing certain tokens to be regulated by the CFTC;
Projects with annual funding of less than $75 million may be exempt from full SEC registration;
Providing a pathway for security-type tokens to transition into commodity-type tokens with “sufficient decentralization”;
Clarifying custody standards and registration requirements;
Exempting developers during the development phase (excluding custody operations);
Providing tax clarity, including exemptions for small transactions and staking rules;
Clarifying support for asset tokenization development.
In addition, there have been adjustments in SEC regulatory positions. SEC Commissioner Hester Peirce stated that the Trading and Markets Division has adjusted the capital treatment for some stablecoin broker-dealers, reducing the previous requirement to reserve 100% of the market value to a 2% risk reserve ratio. The bill will also restrict regulatory agencies from requiring financial institutions to list customer digital assets as on-balance-sheet liabilities or additional capital (besides operational risks), seen as institutionalizing the repeal of SEC Staff Accounting Bulletin No. 121.
