The United States’ proposal to place cryptocurrencies under the control of the Commodities Futures and Trading Commission is being projected to speed up efforts to regulate the digital assets internationally.
New Bill to Define Bitcoin and Ethereum
U.S. officials have released plans for a new bill that would see Bitcoin and Ethereum classified as digital commodities, thereby subjecting them to oversight by the Commodities and Futures Trading Commission (CFTC), along with conventional commodities like corn and aluminum.
The bill further states that no security may be simultaneously labeled as a commodity, and would firmly bring such assets under the SEC’s jurisdiction.
In their attempts to regulate cryptocurrencies, U.S. officials have been utilizing legacy framework that was not created with cryptocurrencies in mind. Due to the resulting ambiguity around which agencies are responsible for which digital assets, investors have been left without explicit protections in the event of fraud.
The Second Significant Milestone in Legislation
The plans for the new bill were unveiled by Senate of Agriculture Committee Chairperson Debbie Stabenow and Senator John Boozman. The legislation is being put forwards as politicians worldwide rush to formulate regulations for cryptocurrency in the wake of Terra’s collapse (LUNA).
The proposal represents the second significant piece of U.S. legislation to have been suggested recently. The first was the bill addressing stablecoins, which was revealed in June. A vote on the bill was scheduled to take place in July, but was delayed. The submitted stablecoin legislation specifies how stablecoins should be regulated, and classifies numerous cryptocurrencies as commodities.
On the Flipside
- European legislators are approaching cryptocurrency regulation with more efficiency than their colleagues in U.S. In June, regulators passed legislation that requires cryptocurrency transfers to be tracked. In this way, they hope to to combat money laundering and terrorism financing.
- In March, the European Union also rejected a bill that was largely regarded as being opposed to bitcoin mining.
- Singapore has outlined a framework that defines digital payment tokens as regulated products separate from other regulated tokens, such as securities. Hong Kong has issued an upcoming mandatory licensing framework for virtual asset exchanges, which are also classified as separate to securities.
Why You Should Care
- The bill would solidify the CFTC’s control over the crypto industry if passed into law. It would also end competition between U.S. regulatory bodies, setting up clear regulations around the emerging cryptocurrency market.
- Due to the size of its market, the United States often sets norms that most of the Western world follows. Any legislation outlined by the United States that aids in the definition of cryptocurrencies may have far-reaching effects, and aid other nations in deciding how to define digital assets and handle the regulation of crypto exchanges.
Find out more about regulations around the world:
Read more about the U.S. Crypto bill below: