Highlights
- A bipartisan group of senators on the Senate Agriculture Committee has put forward a new bill for identifying and classifying “digital commodities” that would place them under the jurisdiction of the Commodities Futures Trading Commission.
- The bill contains language that allows for some assets to be considered “digital securities,” but it explicitly classifies Bitcoin and Ethereum as commodities.
- Lawmakers and industry insiders alike have tended to favor CFTC purview over cryptocurrencies, with many startled by SEC chair Gary Gensler’s more aggressive stance toward the space.
The bill from the Senate Agriculture Committee would place much of the crypto world under CFTC oversight.
Bill Proposes CFTC Oversight Of Digital Assets | New Commodity Definition
A new crypto bill is hitting the Hill.
A team of senators from the Senate Agriculture Committee have put forward a bill that would establish Commodities Futures Trading Commission (CFTC) oversight authority for most digital asset trading venues. Introduced by Senators Debbie Stabenow (D-MI) and John Boozman (R-AR), the bill has bipartisan support in the committee and has the co-sponsorship of Senators Cory Booker (D-NJ) and John Thune (R-SD).
The Digital Commodities Consumer Protection Act of 2022 would codify a legal definition of “digital commodities” and grant oversight powers over exchanges that trade in such commodities to the CFTC. It would also systematize the process by which a digital asset is determined to be a commodity.
The bill explicitly classifies Bitcoin and Ethereum as commodities but “excludes certain financial instruments including securities.” This suggests the bill’s framers are allowing legal room for an unknown number of digital assets to be classified as securities, which would nominally place them under the purview of the SEC.
The bill would also instruct the CFTC to conduct numerous studies on energy consumption and research on race and gender data to inform policy-making.
Said Senator Stabenow 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… 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.”
Both the House and Senate Agriculture Committees have signaled interest in subsuming at least some digital assets under the authority of the CFTC. This is likely owed at least partly to the fact that the Senate and House Agriculture Committees oversee the CFTC but not the SEC—that power is granted to the Senate Banking Committee and House Financial Services Committee. Therefore, any legislation performing a similar task for the definition of “digital securities” would need support in those committees before progressing toward law.
Stabenow and Boozman have worked on the bill since June, joining other lawmakers in efforts to clarify crypto legislation in the U.S. Among the most notable of these was the Responsible Financial Innovation Act, put forward in June by Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY), which also seeks to favor the CFTC as the preferred regulatory body.
Crypto industry insiders and executives have also pressed for the CFTC to have greater influence over the crypto space due largely to perceived hostility toward the space by SEC chair Gary Gensler.
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