According to a new Wall Street Journal report, Michigan Democrat Debbie Stabenow who chairs the Senate Agriculture Committee is joining with Arkansas Republican John Boozman to empower the Commodity Futures Trading Commission (CFTC) to regulate the crypto spot markets via a new class of assets called “digital commodities.”
The article refers to the legislation as the latest salvo in a “competition for jurisdiction” between numerous government bodies and agencies, including the U.S. Securities and Exchange Commission (SEC) and the Federal Reserve.
While the proposed legislation does not include “securities” as part of the newly defined asset class, cryptocurrency exchanges such as Coinbase and FTX would fall under the CFTC’s jurisdiction. They would be required to register with the agency and offer consumer protections.
Boozman said of the new Digital Commodities Consumer Protection Act of 2022 proposal,
“This fast-growing industry is currently governed largely by a patchwork of regulations at the state level. That simply is not an effective way to protect consumers from fraud.
Our bill will empower the CFTC with exclusive jurisdiction over the digital commodities spot market, which will lead to more safeguards for consumers, market integrity and innovation in the digital commodities space.”
The Stabenow-Boozman bill represents the third instance of Senators proposing bills affecting cryptocurrencies in the past two months.
Last Wednesday, Republican Pat Toomey of Pennsylvania and Arizona Democrat Kyrsten Sinema put forth a new measure called “The Virtual Currency Tax Fairness Act” that would exempt small personal crypto transactions from taxation.
The bill will exclude personal crypto transactions worth less than $50 or with gains under $50 from being subjected to capital gains tax. Under the current system, people who use digital assets to pay for goods and services owe capital gains taxes when the value of the coin increases.
Back in early June, another bipartisan proposal from Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) sought to establish a regulatory framework for the crypto industry.
Gillibrand said of The Responsible Financial Innovation Act,
“It is critical that the United States play a leading role in developing policy to regulate new financial products, while also encouraging innovation and protecting consumers.
[This] is a landmark bill that will establish a regulatory framework that spurs innovation, develops clear standards, defines appropriate jurisdictional boundaries and protects consumers.
[It] will provide clarity to both industry and regulators, while also maintaining the flexibility to account for the ongoing evolution of the digital assets market.”
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