The DeFi Education Fund proposes four principles for the crypto clarity bill (Market Structure Bill) to the U.S. Senate.

## Proposal for the "Responsible Financial Innovation Act"

The U.S. cryptocurrency industry organization DeFi Education Fund announced on the 1st its opinions on the "Responsible Financial Innovation Act" and the regulatory framework for digital assets.

The Senate Banking Committee is discussing a draft bill called the "Responsible Financial Innovation Act," which aims to establish a regulatory framework for cryptocurrencies in the United States, and has been seeking feedback from various sectors. This is in response to that.

This opinion statement is co-signed by a16z Crypto, Jump Crypto, Paradigm, Multicoin Capital, Solana Policy Institute, the Uniswap Foundation, and other industry organizations.

The opinion paper proposed four key principles of the market structure bill as follows.

• Clear distinction between DeFi (Decentralized Finance) developers and centralized intermediaries
• A clear definition of intermediaries required to register with authorities
• Criteria for determining whether a protocol is decentralized
• Technology-neutral regulations

DeFi (Decentralized Finance) is

Refers to financial services or systems that operate without a central administrator, utilizing blockchain technology. Abbreviated as "Decentralized Finance." Financial services conducted in DeFi include the issuance of stablecoins, lending of currencies, and cryptocurrency exchanges. Many platforms utilize the Ethereum blockchain.

First of all, it is said that a fundamental distinction should be made between software developers, including DeFi developers, and centralized intermediaries such as centralized cryptocurrency exchanges and the permissionless software they create.

This aims to prevent inappropriate regulations from being applied to DeFi developers and technologies targeting centralized intermediaries.

In fact, the Biden administration's Internal Revenue Service (IRS) was attempting to apply new rules that would require DeFi, similar to securities brokers, to collect and report transaction information on all customers and traders. President Trump signed a bill in April that repealed this requirement, rendering it invalid.

The bill also states that clear criteria should be established to determine whether each protocol can control its system and user assets unilaterally from an independent position.

It calls for codifying the determination of whether the project is decentralized, rather than leaving it to regulators.

Another important aspect of DeFi is providing users with the ability to securely store and manage their cryptocurrencies in a self-custody wallet, which should be protected.

In the House of Representatives, the Clarity Act, which serves as the basis for the "Responsible Financial Innovation Act," has already been passed.