The Senate will classify Bitcoin as a digital commodity – Bitcoin Magazine
- A new bill classifying bitcoin as a digital commodity could be introduced today.
- This move would allow the current watchdog for derivatives and futures markets, the CFTC, to gain regulatory jurisdiction over bitcoin.
- The bill seeks to expand previous definitions in the bitcoin ecosystem, while excluding securities from being digital goods.
Leaders of the Senate Agriculture Committee (SAC) plan 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 goods is fairly new. Currently, the Commodity Futures Trading Commission (CFTC) oversees the regulation of commodity derivatives, rather than the underlying commodity itself. This bill seeks to give the CFTC the ability to regulate spot markets for digital commodities, meaning the regulator would be given the ability to regulate the underlying asset itself.
The bill will also exclude securities from being labeled as a digital good at the same time. Therefore, any and all cryptocurrencies labeled as a security will fall under the jurisdiction of the Securities and Exchange Commission (SEC) rather than the CFTC.
In fact, the SEC has already made several appeals to cryptocurrency exchanges and suggests that they register with the SEC as securities exchanges. This action will place exchanges in the same category as other securities trading platforms such as the New York Stock Exchange.
In addition, the bill will reportedly seek to regulate and define brokers, dealers, custodians and trading facilities. Although semantic, these designations go a long way toward limiting previous attempts to regulate the ecosystem, which resulted in erroneous definitions that could have made it extremely difficult to operate in the space as a transaction validator or service provider—as seen in the previously introduced the Infrastructure Act.
However, this bill reportedly includes an exclusion for “a person” if that person’s involvement in the ecosystem is “solely because that person validates digital commodity transactions.” While this may be a boon to those not directly involved in trading bitcoin, there is still room for these definitions to become difficult.
Also, Democratic SAC Chairwoman Debbie Stabenow and leading Republican John Boozman of Arkansas plan to introduce the bill today. CFTC Chairman Rostin Behnam, a former employee of Stabenow, stated that the regulator is “ready and well placed” to monitor spot markets related to digital commodities.
