A US House hearing marks progress toward a bill that could set U.S. crypto market rules for a fully regulated domestic industry, building on the first half of President Trump’s crypto agenda.
U.S. House Hearing Marks Progress Toward Crypto Market-Structure Bill
The digital assets subcommittee of the House Financial Services Committee held a hearing to consider ideas for crypto market-structure legislation, marking progress toward a bill that could set U.S. crypto market rules for a fully regulated domestic industry.
The crypto market is a decentralized, global network of buyers and sellers exchanging cryptocurrencies.
It operates 24/7, with prices influenced by supply and demand.
The market is structured into various segments: spot markets, derivatives markets, and over-the-counter (OTC) markets.
Spot markets involve trading actual cryptocurrencies, while derivatives markets offer contracts based on cryptocurrency prices.
OTC markets facilitate large transactions between institutions.
The crypto market's structure is also shaped by exchanges, wallets, and payment systems.
The Second Half of President Trump’s Crypto Agenda
Representative Bryan Steil, chairman of the subcommittee, said the first half of President Donald Trump‘s crypto agenda is well underway – Congress’ stablecoin legislation has already advanced through committees in both the House and Senate. A hearing on Wednesday explored the other long-awaited digital assets bill to establish the structure of crypto markets.
Refining Market Structure Legislation
Representative French Hill, the Arkansas Republican who runs the overall committee, indicated that those working on the bill are closer to releasing a legislative discussion draft that reflects feedback from members and market participants. The committee has engaged with stakeholders, including government agencies and industry leaders, to refine and strengthen market structure legislation.
Market structure legislation refers to laws and regulations that govern how businesses operate within a market.
This includes antitrust laws, which aim to promote competition by preventing monopolies and promoting fair business practices.
Key aspects of market structure legislation include merger control, abuse of dominant position, and price fixing.
These laws vary across countries but share the common goal of maintaining competitive markets and protecting consumers.
Conflicts of Interest and Regulatory Oversight
Democrats on the committee repeatedly questioned witnesses about potential conflicts of interest from President Trump‘s crypto businesses. Representatives Maxine Waters and others accused the panel of trying to make Trump ‘the king of crypto’ by passing legislation that could favor his own interests. The lawmakers also drilled down on the proper roles of the Securities and Exchange Commission and the Commodity Futures Trading Commission in future crypto oversight.
Regulatory Clarity Needed
Industry experts, including Tiffany Smith from WilmerHale, emphasized the need for regulatory clarity in the crypto space. ‘Regulatory clarity is needed,’ she said. ‘Market participants have still found it challenging to apply’ securities law to identify which crypto tokens are securities. The definitions become even more complicated when bulk of crypto transactions happen on secondary markets, such as on crypto exchanges.
Next Steps
Representative Hill indicated that a bill is coming soon on market structure. The U.S. House Financial Services Committee has taken another step toward what Representative Steil referred to as the ‘second half’ of President Trump‘s crypto agenda – establishing the structure of crypto markets for a fully regulated domestic industry.
Market structure refers to the organization and arrangement of buyers, 'within a market' , and sellers, as well as intermediaries. It can be categorized into four main types: perfect competition, monopoly, oligopoly, and monopsony.
Perfect competition is characterized by many firms producing homogeneous products, while monopoly involves a single firm dominating the market.
Oligopoly features a few large firms competing with each other.
Market structure affects prices, output, and innovation within an industry.
