U.S. Senate Passes Legislation to Treat Cryptocurrencies as Commodities

The long-anticipated United States Senate cryptocurrency bill that would properly classify crypto assets has finally been passed, The Washington Post reported Tuesday.

The bill, introduced by Senators Cynthia M. Lummis and Kirsten Gillibrand, defines cryptocurrencies as commodities, meaning crypto assets will be treated like gold, crude oil, and wheat, among others. 

CFTC to Govern Cryptocurrencies 

According to the report, the proposed cryptocurrency legislation is the first bipartisan law that aims to provide a comprehensive regulatory framework for cryptocurrencies to protect investors. 

The bill dubbed the “Responsible Financial Innovation ACT,” seeks to move crypto assets out of the Securities and Exchange Commission (SEC) jurisdiction and is placed under the governorship of the Commodities Futures Trading Commission (CFTC).

The CFTC will be responsible for policing the virtual assets to crack down on scams and other illicit activities targeting the need to wipe off funds in the industry. 

Senators Lummis and Gillibrand also noted that the bill aims to strengthen consumer protection rights and provide regulatory standards for digital innovations. 

“Landmark bipartisan legislation that will create a complete regulatory framework for digital assets that encourages responsible financial innovation, flexibility, transparency, and robust consumer protections while integrating digital assets into existing law,” the Senators said. 

The new legislation classified most cryptocurrencies as “ancillary assets,” meaning that these assets will not be subjected to the same treatment as traditional securities under the SEC’s guidance.

However, the Senators noted that virtual currencies can be categorized as securities if the owners receive the same treaties such as dividends and liquidation rights, among other benefits corporate investors are entitled to. 

Lummis and Gillibrand also stated that the proposed bill is a result of months of work with other Senators like Mitch McConnell and Pat Toomey, including Democrats like Ron Wyden.   

Cryptocurrency Regulations Around the World

Although the Senate’s latest proposed bill on cryptocurrencies is the first comprehensive attempt to properly regulate digital currencies in the United States, financial watchdogs around the world have been working around the clock to implement strict policies on the asset class. 

In April, Coinfomania reported that Singapore had introduced a “Financial Services and Markets Bill” to regulate crypto exchanges operating in its jurisdiction. 

Last month, South Korean authorities disclosed plans to establish regulatory frameworks for crypto asset service providers in the country to protect investors.