A bipartisan set of senators from the Senate Agriculture Committee on Wednesday unveiled a proposal to authorize the Commodity Futures Trading Commission to manage the markets for Bitcoin, Ether, and other digital assets that are viewed as commodities.
Democratic senator from Michigan Debbie Stabenow and Republican senator from Arkansas John Boozman are among the legislation's sponsors.
According to the legislators, the bill would give the cryptocurrency market the much-needed regulatory clarity it needs by consolidating most of its regulatory oversight under a single regulator.
With the help of the new bill, the CFTC would have direct control over cryptocurrencies that meet the definition of “digital commodities.”
Additionally, it would mandate that businesses providing crypto platforms, such as exchanges, custodians, and brokers, register with the CFTC.
“Although one in five Americans have used or traded digital assets, these markets do not meet their expectations for transparency and accountability in our financial system. Too frequently, this jeopardizes Americans’ hard-earned money, “Stabenow, chair of the Senate Agriculture Committee, overseeing the CFTC, said.
The CFTC would impose conditions on such registration to ensure that cryptocurrency businesses maintain sufficient funds, prevent corruption, stop exploitative trading practices, uphold fair pricing, and maintain cybersecurity protections, among other consumer rights provisions.
Other Provisions of the Bill
The bill also addressed the importance of other financial watchdogs in policing cryptocurrencies, which are not commodities but act more like equities or other forms of payment.
According to Stabenow, the bill does not intend to regulate every aspect of the cryptocurrency market or limit the Securities and Exchange Commission’s (SEC) ability to regulate digital assets that behave more like securities.
“A security is not something we are defining. I have complete faith in Chairman Gensler’s ability to exercise his powers, “She continued.
The bill’s emphasis on Bitcoin and Ether as commodities aligns with the recent statements made by Gary Gensler, the head of the SEC. He claimed that the majority of other cryptocurrencies are probably securities.
Stabenow and Boozman said they planned to move the bill forward as soon as possible but did not give a specific time frame. Before the midterm elections in November, the window for legislative action will close.
Attempts at Crypto Regulation
The most recent bill is one of several that have been put forth recently to clarify the laws governing cryptocurrencies.
U.S. Senators Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) put forth a bipartisan cryptocurrency regulation bill in June to provide the digital asset market with the definitions it sorely needed to allow for the establishment of a regulatory framework.
Definitions for digital assets can now be established thanks to the bipartisan Senate bill that was recently proposed. The bill also included provisions to give the Commodity Futures Trading Commission regulatory authority over digital assets and to establish an advisory panel to develop guiding principles (CFTC).
Patrick McHenry (R-North Carolina) and Stephen Lynch (D-Massachusetts) introduced a bill in the U.S. House of Representatives in March that called for the formation of a working group made up of industry veterans and representatives from the SEC and CFTC to assess the country’s current legal and regulatory environment surrounding digital assets.