- A new bill classifying bitcoin as a digital commodity could be introduced today.
- The move will empower the current watchdog of the derivatives and futures markets, the CFTC, to gain regulatory jurisdiction over bitcoin.
- The bill seeks to expand on the previous definitions in the bitcoin ecosystem, while also excluding securities from being a digital commodity.
According to a report in the Wall Street Journal, the leaders of the Senate Agriculture Committee (SAC) are planning to introduce a bill that would classify bitcoin as a digital commodity.
The category of digital commodities is quite new. Currently the Commodity Futures Trading Commission (CFTC) oversees regulation for derivatives of commodities rather than the underlying commodity. The bill seeks to empower the CFTC to regulate spot markets for digital commodities, meaning the regulator would be given the ability to self-regulate the underlying asset.
The bill would also exclude securities from being simultaneously labeled as digital commodities. Therefore, any and all cryptocurrencies labeled as a security fall under the jurisdiction of the Securities and Exchange Commission (SEC) rather than the CFTC.
In fact, the SEC has already made several appeals to cryptocurrency exchanges that suggest they register with the SEC as security exchanges. This action would place the exchanges in the same category as other securities trading platforms such as the New York Stock Exchange.
Additionally, the bill will reportedly seek to regulate and define brokers, dealers, custodians and trading facilities. While semantic, these designations go a long way toward undermining previous efforts to regulate the ecosystem, resulting in inaccurate definitions, making operations in the space as a transaction validator or service provider extremely difficult. can build – as seen in the infrastructure bill introduced earlier.
However, the bill reportedly includes an exclusion for “an individual” if the said individual’s participation in the ecosystem is “only because that individual validates digital commodity transactions.” While this may be a boon to those not directly involved in trading bitcoin, there is room for these definitions to be tricky.
In addition, Democratic SAC Chair Debbie Stabeno and Arkansas’ leading Republican John Boozman plan to introduce the bill today. CFTC Chairman Rostin Behnum, a former Stabeno staff member, said the regulator is “ready and well-positioned” to monitor spot markets related to digital commodities.