Alex Cutchey
St. Cloud
The crypto and blockchain sectors hold immense 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.
Despite the U.S. being slow to adopt meaningful regulations in this area, we are seeing increasing bipartisan recognition of the need for regulatory clarity regarding digital assets. The House of Representatives, with bipartisan support passed the Financial Innovation and Technology for the 21st Century Act (FIT21), a bill that will establish a market structure for the regulation of digital assets.
Further, a bipartisan House and Senate passed H.J.Res. 109, a resolution to nullify the regulatory overreach of SEC accounting SAB 121, over concerns on its harmful impact to consumers and financial institutions. This bipartisan support underscores the importance and necessity of FIT21 to provide clear rules and standards for this burgeoning industry.
There are a few key areas where legislation is critical for the crypto and blockchain industry.
First and foremost, consumers must be protected. Cryptocurrencies and transactions can be complex, leaving them open to fraud. Rules protecting consumers from scams will ensure this new sector can be used confidently for legitimate purposes.
Second, clear delineation is needed between the regulatory authority of the SEC and CFTC to create a streamlined and effective regulatory environment to foster innovation and regulatory certainty in the digital asset space. The act’s provisions for registration, compliance and oversight help enhance market integrity by ensuring digital asset exchanges and custodians operate under robust – clear – standards. In addition to protecting individual consumers, regulation that supports cybersecurity more broadly will ensure users and institutions are protected from cyber-attacks when utilizing this new technology.
FIT21 and the regulations it outlines are not just about regulation, they are a critical part of maintaining America’s global competitiveness in this new sector. A robust framework of clear and well-established regulations will not only protect consumers and institutions, but also attract talent and investment to our country. This, in turn, will support continued innovation and entrepreneurship, fostering jobs and economic growth in America.
To realize these benefits, FIT21 needs to make it over the finish line, and the next step is passage in the Senate. I hope Minnesota Sens. Tina Smith and Amy Klobuchar will see the benefits of cryptocurrencies and blockchain technology and throw their support behind FIT21. This bill will ensure America remains a leader in technological innovation.
Alex Cutchey is an attorney advisor at the intersection of Energy and Fintech. He’s a former state utility regulator and has represented hundreds of local governments, as well as electric, gas, telecom and water public utilities as legislative and regulatory counsel. He is passionate about educating others and developing responsible policy in the blockchain space. He holds a juris doctor and a master of business administration from Drake University. Cutchey is a resident of St. Cloud, with his fiancée, a clinical pharmacist at the St. Cloud VA.
