a new bill A bill has been introduced in the U.S. Senate that gives the Commodity Futures Trading Commission (CFTC) powers to regulate top cryptocurrencies. The bipartisan bill was introduced by Democrat Debbie Stabenow and Republican John Boozman, key members of the Senate Agriculture Committee.
Calls for clear regulation of digital assets have been going on for some time, with several proposals already submittedHowever, the new bill clearly defines digital commodities, including Bitcoin, Ether and other cryptocurrencies that are not securities. This could help remove the ambiguity that has resulted in things like Coinbase. Under scrutiny From the Securities and Exchange Commission (SEC).
Bitcoin and Ether considered commodities
bill entitled Digital Goods Consumer Protection Act 2022 In summary, allow derivatives regulators to directly control tokens that qualify as digital commodities. These include Bitcoin and Ether, the two largest digital assets.
Additionally, brokers, custodians, and exchanges must be registered with the CFTC to offer cryptocurrency platforms. This registration is therefore subject to rules to ensure fair pricing, prevent market manipulation, avoid conflicts of interest and maintain “adequate financial resources”.
Currently, most cryptocurrency exchanges are governed by state law, as there are no clear federal regulations or oversight requirements. However, the SEC has indicated that cryptocurrency exchanges that list digital assets should be recognized as domestic stock exchanges. Nevertheless, the new bill stipulates that these platforms will be treated like their traditional financial counterparts.
US lawmakers continue to work on measures to protect recently witnessed crypto industry considerable instability When notable failureEarlier this year, the Senate Agriculture Committee gave the CFTC provide more guidance About digital assets. In February, the committee also high profile hearings With industry experts on this issue.
The new bill joins several bills Other laws We are being asked to clarify the rules regarding cryptocurrencies.have also received important backing From cryptocurrency experts who believe the CFTC, not the SEC, should oversee digital assets other than security.
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Differences between CFTCs and SECs
The CFTC is an independent agency of the US government that oversees the US derivatives market. futures, swap, and certain kinds of options. It is very different from the SEC, which is in charge of securities. Its objectives include fostering competitive and effective markets and protecting investors from manipulation, unfair business practices and fraud.
Recently, as the CFTC has been receiving more and more calls to provide oversight capabilities in the digital asset space. announced New Tech Innovation Office. CFTC Chairman Rostin Behnam further clarified that his organization is well positioned to play a more significant role. But a new bill defining Bitcoin and Ether as commodities would ensure derivatives regulators have more responsibility in the digital asset space.
The emergence of cryptocurrencies has led to the debate over whether they are commodities or securities. By definition, a commodity is an economic good with perfect or significant fungibility. This means that the market treats instances of goods as similar or nearly equivalent, regardless of who manufactured them. However, securities are fungible financial instruments that represent holding positions used to raise capital in the form of equity (stocks), debt (bonds), or a combination of both.
According to these definitions, both Bitcoin and Ether can be considered commodities.according to report, their ability to offer highly popular digital commodities on the block space makes them fit the bill. increase. However, not all other digital assets fall into the same category.
The debated impact of the new bill by its sponsors is to provide much-needed regulatory clarity to the crypto market. Speaking about the new legislation, Senator Stabenow reiterated the importance of closing regulatory gaps while enacting rules to protect consumers and the financial system.she Said,
“One in five Americans use or trade digital assets, yet these markets lack the transparency and accountability we expect from our financial system. If this is the case, this puts Americans’ hard-earned money at risk, so that we can close regulatory gaps and ensure that these markets operate under simple rules that protect customers and keep the financial system safe. I am requesting that you
However, Stavenau said the bill does not cover the entire cryptocurrency industry. Therefore, the SEC’s authority will not be compromised. Therefore, she expects securities regulators to continue cracking down on crypto products that fall under their mandate.
Although the new bill has gained support from the crypto community, it is still a long way from being enacted. However, no definitive timeline was given.
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