Congressional leaders in Washington have introduced a revised bill on the 28th of April to regulate crypto developers, exchanges, dealers, and stablecoin providers. The bill would place these entities under the jurisdiction of the United States CFTC (Commodity Futures Trading Commission), which would be in charge of regulating their operations.
The Digital Commodity Exchange Act
A new bill titled “The Digital Commodity Exchange Act” would provide the CFTC with the power to establish regulations for cryptocurrency creators and exchanges that offer spot trading in cryptocurrencies. Republicans Tom Emmer and Glenn Thompson brought up the Digital Commodity Exchange Act of 2022 (DCEA) at the Congress, with Democratic co-sponsors Ro Khanna and Darren Soto joining them in favor of the legislation.
The new edition adds a section on providers of stablecoin, who may register as an operator of “fixed-value assets” to provide their services. They would be required to provide information about how stablecoin functions, including keeping records of transactions and information about the assets that back them and ways to protect them.
Following the passage of the previous measure, the CFTC would be authorized to register and monitor crypto exchanges that provide spot trading options which enable traders to purchase cryptos at the present market price.
New Bill To Bring Clarity To Crypto Sector
The DCEA would not affect the SEC regulatory authority over cryptos but would instead classify cryptos not under securities as virtual commodities regulated by the CFTC.
The same standards that apply to other commodity suppliers would also apply to cryptocurrency exchanges when launching new coins on their networks. Exchanges must establish that the cryptocurrency is “not easily subject to manipulation” by examining its mechanics, including its “purpose, operation, distribution, participation, and governance structure.”
Crypto developers might also register with the CFTC and provide the disclosures necessary for public listing and trading on a cryptocurrency exchange. According to a description of the legislation, registration would guarantee that records are accurate and that general information concerning cryptocurrency is uniform.
Self-regulatory groups are expanding in tandem with new crypto regulations in the United States. Regulatory ambiguity has plagued cryptocurrency firms functioning in the United States. In a press release, the bill’s supporters said that it would assist in reducing the existing confusion of present laws, with Soto stating that:
“It is vital for digital commodities markets to have regulatory certainty to stimulate customer protection and innovation. Due to the existing legislative uncertainty between what is a security and a commodity, developers are paying over 50% of their start-up expenditures on legal expenses.
The Crypto Council for Innovation, an advocacy group, welcomed the law noting that it provides a new atmosphere for innovation. In February, at a Senate meeting on crypto assets, the head of CFTC, Rostin Behnam, informed legislators that the agency lacked the power to police the crypto sector because of conflicting rules. Behnam described the cryptocurrency industry as an “uncontrolled market,” and giving more regulatory power to the CFTC will unfold so many events in the market.