The world of investment products is becoming increasingly complex. It requires reasonable and balanced policies that protect individual investors, but without unduly interfering with the potential for market modernization and innovation.

When Americans invest today, we are largely protected by a system of laws and regulatory bodies that were established after the Great Depression to prevent fraud and manipulation.  At times, policymakers have overcorrected—layering on rules that create bureaucracy without delivering meaningful protection. But history has made one thing clear: core safeguards—like prohibitions on insider trading, rules against market manipulation, and basic disclosure requirements—are essential to protecting everyday investors.

In the present day, many of us take these protections for granted. They’re baked into our established markets and provide us assurance that our savings and investments are being protected from fraud and scams. But investors must be aware that certain innovative financial products are not being subjected to the same rules, disclosures and oversight as, for instance, shares of stock in a company. 

Cryptocurrency is currently in this category. When crypto was first put on the market, it was largely intended to be a stable currency that would make commerce more efficient.   Since that time, however, the financial sector has boomed with new crypto products.  There are crypto funds that allow investors to make leveraged bets (high risk, high reward) and products that are not intended to have stable values, and are designed to move up or down based on hype (including the celebrity-endorsed coins you see touted on social media). 

But there are a lot of digital asset innovations that offer major promise, including tools that can help everyday Americans save for retirement, establish a college fund for their children, and purchase their first home. And as everyday investors enter digital asset markets, they will be expecting the same protections they receive in established markets. 

So, with Congress now establishing rules of the road for all digital assets, it is clear that they need to apply the same time-tested investor safeguards that have protected Americans for decades. At the end of the day, we don’t want retirees on limited incomes becoming involved with investments they don’t understand and losing life-savings that cannot be replenished.

As this debate moves forward, Congress needs to consider that investor protections and innovation are not in conflict and that finding a balance between the two must be the North Star. Everyone in a market deserves ground rules that ensure transparency, fairness and equal footing for each investor.

Representative Demetrius Douglas is a Democratic member of the Georgia House of Representatives representing District 78 in Henry and Clayton counties. First elected in 2012, he is a real estate professional and serves on several key House committees, including Banks & Banking.