US Senator Gradual Approach Should Be Taken in Drafting Cryptocurrency Regulation Bill

US Senator calls for gradual approach in drafting cryptocurrency regulation bill.

Author: Sarah Wynn, The Block; Translation: Song Xue, LianGuai

• Bill Hagerty, a Republican senator from Tennessee, said that a progressive approach can create certainty, allowing lawmakers to learn from what they are doing and continue to listen to the industry’s opinions.

As lawmakers return from their summer recess and continue to push for cryptocurrency legislation, Republican Senator Bill Hagerty of Tennessee said they should focus on a progressive approach rather than a larger bill.

On Thursday morning, Hagerty said at an event hosted by the Cato Institute, “My view is, don’t try to propose a complete solution all at once, but try to do it step by step.”

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At the time of this statement, lawmakers had developed legislation last summer to regulate cryptocurrencies, some taking a comprehensive approach and others focusing on specific issues.

In July of this year, legislation was introduced by the Republican-led House Financial Services Committee and the House Agriculture Committee, which comprehensively reformed the regulation of the cryptocurrency market, in part to create a pathway for digital assets to transition from securities investments to commodities. The bill will next be voted on by all members of the House.

In the Senate, a bipartisan group introduced a bill in July that specifically outlines how existing rules apply to decentralized finance, tightening existing rules aimed at combating money laundering and sanctions evasion.

Hagerty is a member of the Senate Banking Committee and last year introduced several short-term bills to regulate cryptocurrencies, including one that would provide exchanges with a safe harbor from certain enforcement actions by the U.S. Securities and Exchange Commission.

Hagerty said that a progressive approach can create certainty, allowing lawmakers to learn from what they are doing and continue to listen to the industry’s opinions.

Hagerty said, “My legislation is only two pages long, not the complex behemoths that Congress proposes.” “I admire my colleagues, but they seem to judge legislation based on the number of pages, which as a businessman, I do not. Simplicity has great value, especially when we are in such a rapidly developing industry.”

He added that lawmakers need to set broad boundaries so that innovation can continue, and then respond accordingly.

“Pick and Choose”

Hagerty also criticized the U.S. Securities and Exchange Commission’s “enforcement procedure regulation” on Thursday.

“What they are doing is not clarifying a set of standards, but allowing the market to develop, and then they just pick and choose where they want to implement enforcement procedures and then say, well, we don’t like it, so it’s wrong,” Hagerty said. He added that this creates uncertainty.

Hargreaves said that the “posture” of Gary Gensler, Chairman of the U.S. Securities and Exchange Commission, is harmful to the entire industry.

Hargreaves said, “This depends on the decision of the Senate and the House of Representatives.”

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