The top Republican and top Democrat on the Senate Agriculture Committee proposed a new bipartisan bill that would give the Commodity Futures Trading Commission regulatory authority over Bitcoin and Ethereum.
Co-sponsored by Senators Debbie Stabenow (D-MI) and John Boozman (R-AR), the Digital Commodities Consumer Protection Act would classify the two largest cryptocurrencies as digital commodities under the purview of the CFTC. The commission would also be empowered to regulate any other digital assets that can be classified as commodities, allowing the CFTC to expand its oversight with time.
In addition, crypto exchanges such as Coinbase
"Digital assets and blockchain technology have already, and will continue, to change the way global markets function. Yet, this fast-growing industry is currently governed largely by a patchwork of regulations at the state level," Senator Boozman said in a release. "That simply is not an effective way to protect consumers from fraud. Furthermore, relying solely on state regulation does not ensure that rules and regulations work for all stakeholders. Our bill will empower the CFTC with exclusive jurisdiction over the digital commodities spot market, which will lead to more safeguards for consumers, market integrity and innovation in the digital commodities space."
Sens. Cory Booker (D-NJ) and John Thune (R-SD), also sponsors of the bill, joined Stabenow in voicing their concerns with the existing gaps between state regulations. All sponsors of the bill have voiced their hopes to patch gaps in state laws to provide "regulatory certainty" to investors entering the crypto market.
The Senate Has Been Busy this Year
Sens. Boozman, Stabenow, Booker, and Thune are far from the only members of Congress to have pushed for greater regulation of crypto markets.
In April, Representatives Glenn Thompson (R-PA), Ro Khanna (D-CA), Tom Emmer (R-MN), and Darren Soto (D-FL) proposed the Digital Commodity Exchange Act, which similarly looked to place regulation of digital assets under the CFTC, though stopped at making registering exchanges optional. Sens. Kirsten Gillibrand (D-NY) and Cynthia Lummis (R-WY) proposed a similar bill to give regulatory authority of crypto to the CFTC, though their proposal provided a more detailed overview of regulatory authority than the Boozman-Stabenow bill.
Classifying cryptocurrencies as commodities to place the under the scope of the CFTC's authority is emerging as the favored solution by both regulators and blockchain companies alike. Having much less stringent regulations for trading than the U.S. Securities and Exchange Commission (SEC), the CFTC is considered easier to work with by companies like Coinbase, which have a tense history with the traditional financial regulator.
The SEC isn't likely to back down from its own push to secure some degree of regulatory authority over crypto. The regulator recently expanded its cryptocurrency enforcement division and has long traded barbs with companies like Coinbase as the agency probes their activities, likely hoping to establish regulatory precedent.
