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Gaps in the US current policy landscape need to be filled

Recognizing the need for greater regulatory clarity, Treasury recommends that regulators issue new rules and guidance to provide regulatory clarity to crypto firms. This recommendation is timely, as just last week, two Senate hearings examined critical open questions of crypto policy.

At its annual oversight hearing before the Senate Banking Committee on 15 September, SEC Chairman Gensler was pressed by ranking member Senator Toomey to explain SEC rules for determining whether a token is a security or a commodity in addition to the process for crypto intermediaries to register with the commission.

The hearing invigorated a longstanding critique that the SEC has opted to take a reactive, enforcement position as opposed to a proactive guidance posture. In another hearing with the Senate Agriculture Committee, policy-makers discussed the recently proposed Digital Commodities Consumer Protection Act and debated questions of jurisdictional authority.

While the reports neither provide clarity on the legal status of crypto assets nor delineate clear regulatory swim-lanes, the 21 reports articulate the need for gap filling, amplifying the call for congressional action.

This call dovetails with efforts in the European Union (EU) to develop the Markets in Crypto Assets (MiCA) regulation, which will create rules and guidance for EU member states on crypto assets. As the US and EU move toward developing approaches to crypto regulation, further international collaboration will be key to addressing the global, decentralized nature of web3.