Is there a chance for cryptocurrencies to become commodities? The draft on the discussion of the structure of the digital asset market will hold a public hearing next week.

The "Discussion Draft on Digital Asset Market Structure" was released by the House Financial Services Committee, co-sponsored by Chairman Patrick McHenry and Agriculture Committee Chairman Glenn Thompson. This draft legislation aims to establish a functional framework to provide regulatory certainty for digital asset companies and address the ongoing debate in the crypto industry about whether digital assets should be classified as commodities or securities.

Justin Slaughter, Policy Director at crypto investment firm Paradigm, commented on Twitter, "It's rare to see two chairmen collaborate like this." Slaughter also shared various summaries and insights on the bill on his Twitter account. However, he noted that the bill was introduced by Republicans and is likely to pass in the House but will need some Democratic support to become law.

It's very rare to see two Chairs collaborate like this. In fact, it basically only happens for very marquee legislation.

Usually, when a topic crosses into the jurisdiction of multiple committees, each committee works on their own topic and the text is then combined. 6

— Justin Slaughter (@JBSDC) June 3, 2023

Are Crypto Assets Commodities or Securities?

This draft focuses on the structure of the crypto market and addresses one of the hottest topics in the crypto industry—Are crypto assets commodities or securities?. The draft provides a middle-ground framework that allows digital assets that may have been considered securities in the past to be classified as commodities if they can demonstrate sufficient decentralization on their blockchain. The U.S. Securities and Exchange Commission (SEC) will need to provide detailed analysis of any objections to a blockchain not being decentralized enough.

If this bill passes, it will also delineate the regulatory authority of the Commodity Futures Trading Commission (CFTC) and the SEC over crypto.

Circle CEO Jeremy Allaire to Testify

According to a tweet by Fox Business reporter Eleanor Terrett, Circle CEO Jeremy Allaire, Coy Garrison, partner at Steptoe & Johnson law firm, and Emin Gün Sirer, founder and CEO of Ava Labs, will testify at the House Financial Services Committee's digital asset hearing next Tuesday.

Circle CEO Jeremy Allaire also expressed his excitement on Twitter, stating that the draft has made significant progress on key issues related to Federal Reserve standards and rules, custody and consumer protection, algorithmic stablecoin governance, interoperability standards, and rules that help banks expand digital asset custody. One core issue is ensuring that federal regulators can set a baseline for stablecoin issuers. He looks forward to sharing his testimony at next week's hearing.

9/ I look forward to sharing my written testimony early next week, and for a productive hearing with members of Congress. Thank you @PatrickMcHenry and @RepMaxineWaters for your continued focus on this issue.

— Jeremy Allaire (@jerallaire) June 9, 2023