On August 3, four Senators from the Agriculture Committee introduced legislation to establish a regulatory regime for cryptocurrencies. The Digital Commodities Consumer Protection Act of 2022 would establish a legal definition for digital commodities and place their trading under the jurisdiction of the Commodity Futures Trading Commission (CFTC).
Per a report by The Wall Street Journal, the bill developed by Agriculture Committee Chairwoman and Michigan Democrat Debbie Stabenow and Arkansas Republican Senator John Booznam, would allow the CFTC regulatory control over spot markets for the newly defined ‘digital commodities,’ which according to a summary of the plan include Bitcoin and Ether. Currently under the purview of the CFTC is oversight over derivatives such as swaps and futures, but not the commodities underlying them.
Stabenow said in a statement,
One in five Americans have used or traded digital assets -- but these markets lack the transparency and accountability that they expect from our financial system. Too often, this puts Americans’ hard-earned money at risk. That’s why we are closing regulatory gaps and requiring that these markets operate under straightforward rules that protect customers and keep our financial system safe.
The chairman of the CFTC, Rostin Behnam, has said the agency is well-positioned to take on this bigger role. For this new proposal to become law, it would require multiple votes in the Senate. In addition to granting the CFTC new powers, the senators' bill would direct the CFTC to undertake a number of new studies relating to cryptocurrencies. Along with its new powers, the regulator would have to write a report on the energy consumption and resources used to trade and create digital assets and will publish the findings on its website. The CFTC has said it would also have to study the racial, ethnic, and gender demographics of customers taking part in the digital commodity market. According to an overview of the bill, the senators' plan would have the CFTC impose a series of new oversight measures. Per the bill, digital commodity platforms, including custodians, dealers, and trading facilities would have to register with the CFTC. “Associated persons” of dealers and brokers working with digital assets would also have to meet certain registration requirements.
This bill represents the newest addition in a host of new bills aimed at defining jurisdiction over the digital asset class, including the Lummis-Gillibrand bill proposed in June, which aims to clarify elements of cryptocurrency regulations, as well as to correctly classify digital assets.
