If passed, the act would streamline a number of disparate cryptocurrency regulations in the U.S., creating legal clarity for token issuers and lowering the barrier to entry for exchanges hoping to operate in a compliant manner.

“The proposed legislation builds on the existing commodity market practices required of Futures Commission Merchants (FCMs) to protect customer assets. DCEs would be required to segregate customer assets and hold them in separately regulated entities which are licensed to custody digital assets,” a summary of the bill said.

The DCEA wouldn’t create prescriptive rules on how exchanges can comply with the new law. Rather, it would describe the requirements and let the exchanges themselves figure out the best way to meet those requirements.

“The CEA works through principles-based regulation, laying out high-level principles – ‘core principles’ – that a regulated entity has to meet,” a committee aide told CoinDesk. “The regulated entity is given flexibility on how to meet those principles, but the CFTC has oversight and can decide if it has met those principles or not. The regulatory regime under the CEA works in large part because it creates a more flexible framework and lets regulated entities be more innovative.”