A Bipartisan Measure Would Grant The Commodity Futures Trading Commission (CFTC) Power For Exchanges As Well As Stablecoins

The bill will need to go before the Agriculture Committee for a hearing. If the bill passes the House, it will be considered by the Senate Agriculture Committee.

Republican Representatives Glenn Thompson and Tom Emmer reintroduced the Digital Commodity Exchange Act of 2022 (DCEA) in Congress, with Democratic co-sponsors Darren Soto and Ro Khanna. A section on stablecoin providers, who can register as a fixed-value digital commodity operator, has been included to the amended edition.

For digital commodity markets to encourage innovation and consumer protection, regulatory certainty is essential. Because of the current legislative ambiguity between what is a security and what is a commodity.

The Digital Commodity Exchange Act would empower the commodities regulator to set rules for cryptocurrency creators and exchanges that provide spot trading. On Thursday, a bipartisan group of lawmakers in Washington, D.C. introduced an updated bill to regulate cryptocurrency developers, dealers, exchanges, and stablecoin providers, bringing them under the US Commodity Futures Trading Commission’s regulatory control (CFTC).

Fixed Value Digital Commodity Operator

Republican Representatives Glenn Thompson and Tom Emmer reintroduced the Digital Commodity Exchange Act of 2022 (DCEA) in Congress, with Democratic co-sponsors Darren Soto and Ro Khanna. A section on stablecoin providers, who can register as a fixed-value digital commodity operator, has been included to the amended edition. These companies would be required to share information about how the stablecoin works, keep records for the regulator, and provide information about the assets underpinning the fixed-value digital commodity and how they’re safeguarded.

According to the previous law, the DCEA would allow the CFTC to register and oversee cryptocurrency exchanges that provide spot trading of crypto commodities, which allows traders to buy cryptocurrencies at the current market price. The DCEA would not modify the SEC’s regulatory authority over digital asset securities offerings; rather, it would define cryptocurrencies that are not securities as digital commodities, bringing them within the CFTC’s jurisdiction.

For listing new cryptocurrencies on their platforms, crypto exchanges would be subject to the same restrictions as other commodities providers. By examining its mechanics, such as its goal, operation, governance structure, distribution, and participation, exchanges must show that the crypto is not easily subject to manipulation.

ALSO READ – Director of the Software Freedom Law Centre thinks that the US needs electronic token

Cryptocurrency developers could voluntarily register with the CFTC and make the disclosures required for public trading and exchange listing. According to the act’s description, registration would ensure that records are accurate and that public information about the cryptocurrency is standardized, which might make public exchange listings easier. Regulatory uncertainty has plagued cryptocurrency businesses operating in the United States, and the bill’s co-sponsors said in a statement that it will help to alleviate the present laws’ uncertainty, with Soto saying:

Commission Lacking The Ability To Enforce The Crypto Area Due To Conflicting Regulations

For digital commodity markets to encourage innovation and consumer protection, regulatory certainty is essential. Because of the current legislative ambiguity between what is a security and what is a commodity, innovators are spending up to half of their start-up expenditures on legal fees. The Crypto Council for Innovation, an industry advocacy group, dubbed the measure a step forward since it creates a new atmosphere of possibility without restricting innovation, adding: This is one of a few bills that the business should keep an eye on.

During a Senate hearing on digital assets in February, CFTC chair Rostin Behnam told lawmakers that the Commission lacked the ability to enforce the crypto area due to conflicting regulations. More regulatory authority for the CFTC would only allow us to observe what’s going on below the hood, Behnam said, describing the crypto industry as in essence an unregulated market. The bill will need to go before the Agriculture Committee for a hearing. If the bill passes the House, it will be considered by the Senate Agriculture Committee.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing