WASHINGTON—More than three months after the U.S. House of Representatives passed legislation regulating cryptocurrencies and other digital assets, Sen. John Boozman, R-Ark., is helping continue the effort to establish federal oversight.

A recent legislative discussion draft from Boozman and New Jersey Democrat Cory Booker marks another step toward the United States having a modern regulatory framework for these commodities, with lawmakers hopeful about creating a friendly and safe environment for investors.

Boozman and Booker's proposal builds upon the House's passage of the CLARITY Act in July. Both the Senate discussion draft and the House bill instruct the federal Commodity Futures Trading Commission to regulate digital commodities markets and related transactions.

Boozman chairs the Senate Agriculture, Nutrition and Forestry Committee, which has legislative jurisdiction over agriculture and digital asset commodities.

"Though a regulatory framework for spot digital commodities has yet to be authorized by Congress, the markets and underlying technology are fast at work," the Arkansan said during a Nov. 19 committee hearing.

As cryptocurrencies and digital assets have gained popularity, the United States and its international counterparts have been forced to evaluate existing regulations and consider new rules protecting consumers and markets.

The European Union, for instance, has been under the Markets in Crypto-Assets regulation since last December. The policy provides legal clarity for digital assets trading and related services.

"Absent a comprehensive U.S. regulatory framework, bad actors will continue to go unchecked and legitimate entities will be disincentivized from participating in U.S. markets," Boozman said. "All the while, U.S. consumer participation will continue to grow, as will the risks faced by consumers."

During the hearing, Michael Selig -- President Donald Trump's pick to lead the Commodity Futures Trading Commission -- told senators that Congress needs to prioritize a regulatory framework for digital assets rather than accept a "one-size-fits-all approach."

"We have so many entrepreneurs and builders and developers that have been pushed offshore, and this has been due to the lack of clarity," he said. "We need clear, simple guidelines, we need consumer protection, and we need to stop with the regulation by enforcement."

Max Avery, vice chair of the Arkansas Blockchain Council -- a nonprofit association advocating on behalf of cryptocurrency entities -- echoed Selig's point to the Arkansas Democrat-Gazette, stressing the importance of digital asset rules allowing the United States to compete internationally.

"The longer we delay this and the longer we kick the can down the road, the more advantage it gives to other countries that are already moving with market structure (rules) ahead of us," he said.

"The important thing is that we want American companies to stay American companies, and we want them to operate within the legal framework that we have in the United States and are willing to do that, but they have to have that in place to be willing to do so."

The House approved two other measures on digital assets along with the CLARITY Act as part of "crypto week." The additional bills -- the GENIUS Act and the Anti-CBDC Surveillance State Act -- would regulate cryptocurrencies tied to stable assets such as the U.S. dollar and prohibit the Federal Reserve from issuing a digital currency.

Rep. French Hill, R-Ark., introduced the CLARITY Act and spearheaded the House's "crypto week" campaign in his capacity as House Financial Services Committee chair. In an interview with the Democrat-Gazette, the Little Rock congressman said Boozman and Booker did a good job interpreting the House bill's intent with their discussion draft.

"When I look at their work, my assessment will be, did they improve the CLARITY Act, did they add strength and support to the bill, and can the changes that they proposed also be supported in the House?" he added.

Boozman and Hill assisted in launching a bicameral working group in February focused on passing digital asset legislation during this Congress. Senate Banking Committee Chair Tim Scott, R-S.C., and House Agriculture Committee Chair GT Thompson, R-Pa., worked alongside the Arkansans to create the coalition.

The Senate Banking Committee released its own CLARITY Act discussion draft over the summer following the House's "crypto week."

"We laid out what our goals were for the year, which were to pass a market structure bill and pass a dollar-backed stablecoin piece of legislation," Hill said about the bicameral working group. "The House did both of those things before the August recess."

There is momentum for passing cryptocurrency regulations in this Congress, with some Democrats supportive of GOP-led legislation. Seventy-eight House Democrats supported the CLARITY Act, and 102 Democratic members backed the GENIUS Act.

When the Senate passed the GENIUS Act in June, 18 Democratic senators joined their Republican colleagues to pass the bill.

"There are still people sitting on the sidelines with good products, and they want to integrate to make things faster, better and more transparent," Avery said. "They don't want to take those steps until they have a clear market structure in place and they know they're on the right side of regulators and legislation."

Amid the ongoing legislative push on Capitol Hill, some Democrats are also calling for action addressing Trump's interest in cryptocurrencies. These lawmakers have cited the president's ties to the industry -- including his family's involvement with the World Liberty Financial firm -- as a reason to demand legislation banning all federal lawmakers from sponsoring digital assets.

The GENIUS Act prohibits members of Congress and any "senior executive branch official" from issuing payment stablecoins while in office, but the law does not contain specific language concerning individuals serving as president.

Click here to read this story on the Arkansas Democrat-Gazette website.