New US bill listing Bitcoin as a commodity

Four US Senators, members of the Agriculture Committee, have tabled a bill that classifies Bitcoin and other cryptocurrencies as commodities. This guide would give the Commodity Futures Trading Commission (CFTC) broader powers to control the industry.

A second bill would make the CFTC the dominant watchdog of the cryptocurrency industry

A second bill to regulate cryptocurrencies has just been proposed in the United States Senate, expanding the commodities category for the occasion. From now on, “Digital commotion” could be a regulatory standard applicable to many cryptocurrencies. But this new legislative effort, laudable as it is, still does not answer the main question which is to clearly distinguish cryptocurrencies that fall into the category of commodities (assets) or those that fall under the regime of securities (financial securities). Today, only Bitcoin seems to have consensus.

Regulation

Bitcoin is a commodity

Nathalie E. – June 28, 2022 – 10:58 am

Securities and Exchange Commission (SEC) chairman Gary Gensler […]

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Despite this capital obstacle, this new project, if it becomes law, would grant the CFTC authority to oversee spot cryptocurrency markets. It, which until now only regulated its derivatives, such as BTC futures, could therefore also regulate the underlying asset.

A jurisdiction that would still rely on the Securities and Exchange Commission (SEC) to determine whether this or that cryptocurrency falls under the commodity scope. To do this, the regulatory body has an arsenal of tools including the famous “Howey test” which, since the 1930s, defines what a financial security is and is not. But, for the moment, it continues, to the chagrin of the players in the sector, to maintain a very unartistic vagueness on the issue.

The CFTC is holding the rope in the upcoming cryptocurrency regulation

The declared intention is tohomogenize a regulation that struggles to unify as stated by Senator Debbie Stablenow, chairman of the commission that presented the bill.

Right now, there really is a patchwork of state regulations and no federal agency to oversee cryptocurrencies, and we know it needs to change. We are closing regulatory gaps and requiring these markets to operate under simple rules that protect clients and keep our financial system secure.

Indeed, if adopted, cryptocurrency market participants would have to register with the federal agency. A need welcomed by the CEO of FTX. He assured him that his company would be happy to undergo this new proposed regime.

I’m really happy to see (…) IIntroduce a strong bill to bring customer protection and federal oversight to cryptocurrencies. (…) This would ensure clear federal oversight of commodity markets for digital assets. (…) We would find it constructive and healthy to sign up for such a regime, finally bringing comprehensive customer protection and oversight to spot cryptocurrency markets in the US. This would help strengthen liquidity, while dealing with bad actors in the ecosystem.

Sam Bankman-Fried on Twitter

CFTC president Rostin Behnam, who has been fighting for a while to place his agency in pole position in the implementation of the upcoming cryptocurrency regulations, has welcomed this new initiative. After the financial innovation bill filed in June by Senators Cynthia Lumnis and Kirsten Gillibrand that already authorized the CFTC to control the industry, the federal agency could end up stealing the SEC’s leading role from Gary Gensler.

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