Leaders of the Senate Agriculture Committee (SAC) are planning to introduce a bill that would classify bitcoin as a digital commodity, according to a report from the Wall Street Journal.
The category of digital commodity is fairly new. Currently the Commodity Futures Trading Commission (CFTC) oversees the regulation for derivatives of commodities, rather than the underlying commodity itself. This bill seeks to empower the CFTC to regulate spot markets for digital commodities which means the regulator would be given the ability to regulate the underlying asset itself.
The bill will also exclude securities from simultaneously being labeled a digital commodity. Therefore, any and all cryptocurrencies labeled as a security would fall under the jurisdiction of the Securities and Exchange Commission (SEC) rather than the CFTC.
In fact, the SEC has already made multiple appeals to cryptocurrency exchanges suggesting they register with the SEC as security exchanges. This action would place exchanges in the same category as other securities trading platforms like 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 towards curtailing previous attempts at regulating the ecosystem which resulted in mistaken definitions that could have made operating in the space as a transaction validator or service provider extremely difficult – as seen in the previously introduced infrastructure bill.
However, this bill reportedly includes an exclusion for “a person” if said person’s involvement in the ecosystem is “solely because that person validates digital commodity transactions.” While this could be a boon for those not directly involved in the trading of bitcoin, there is still room for these definitions to get dicey.
Furthermore, Democratic SAC Chairwoman Debbie Stabenow and leading Republican John Boozman of Arkansas plan to introduce the bill today. CFTC Chairman Rostin Behnam, a former staff member for Stabenow, stated the regulator is “ready and well situated” to oversee spot markets related to digital commodities.
