October 11, 2022

The Honorable Sherrod Brown
Chairman
Senate Banking Committee
534 Dirksen Senate Office Building
Washington, D.C. 20510

The Honorable Patrick Toomey
Ranking Member
Senate Banking Committee
534 Dirksen Senate Office Building
Washington, D.C. 20510

The Honorable Debbie Stabenow
Chairwoman
Senate Agriculture Committee
328A Russell Senate Office Building
Washington, D.C. 20510

The Honorable John Boozman
Ranking Member
Senate Agriculture Committee
328A Russell Senate Office Building
Washington, D.C. 20510

The Honorable Maxine Waters
Chairwoman
House Financial Services Committee
2129 Rayburn House Office Building
Washington, DC 20515

The Honorable Patrick McHenry
Ranking Member
House Financial Services Committee
2129 Rayburn House Office Building
Washington, DC 20515

The Honorable David Scott
Chairman
House Agriculture Committee
1301 Longworth House Office Building
Washington, DC 20515

The Honorable Glenn “GT” Thompson
Ranking Member
House Agriculture Committee
1010 Longworth House Office Building
Washington, DC 20515

Re: Prioritizing Investor Protection and Existing Regulatory Frameworks in Digital Assets Legislation

Dear Chairs and Ranking Members:

The Securities Industry and Financial Markets Association (“SIFMA”) commends the Senate Banking Committee, Senate Agriculture Committee, House Financial Services Committee, and House Agriculture Committee (collectively, “Committees”) for their leadership in seeking to address the important issues raised by various digital asset product types. As the Biden Administration pursues a whole-of-government approach to digital asset regulation, it is clear that Congress has an important role to play in leading the effort to provide structure and legal certainty for this developing market.1 As you continue this work within the Committees and across Congress, SIFMA encourages you to prioritize investor protection, apply a technology neutral approach, and follow the principle of “same activity, same risk, same regulatory outcome.” This principle importantly recognizes the need for similar regulatory requirements when different entities’ activities pose similar risks. However, the principle also embraces the reality that different actors can conduct the same activity and produce very different risks, depending on a host of factors including scale, scope of services, and other regulated functions, meriting a different regulatory approach. As we discuss below, digital asset activities could be subject to either bank or non-bank and either federal or state regulatory frameworks depending on a range of factors, so long as they yield comparable regulatory outcomes. We encourage Congress to utilize existing regulatory frameworks that have helped make U.S. financial markets the strongest and most resilient in the world, recognizing that key innovations will be necessary to reflect blockchain technology’s unique characteristics.