The Commodity Futures Trading Commission (CFTC) is an independent federal agency. CFTC agency regulates the derivatives market in the United States and includes future contacts, options, and swaps. CFTC allows the promotion of competitive markets. The commission protects the investors against manipulation, abusive trade practices, and fraud. The Commodity Futures Trading Commission Act established the CFTC in 1974. Now 3 bills are being launched in the United States to regulate cryptocurrency spot markets.
Most of the crypto exchanges are regulated at the state level today. There are no proper federal guidelines for the registration process. SEC has stated that the crypto exchanges listing digital securities should be treated as national securities exchanges.
Lately, crypto has been pushing the federal agency or congress to be clear in this process. Crypto wants them to make a clear definition of a digital commodity. Crypto will then be cleared when they can register with CFTC or the securities and exchange commission.
A lengthy debate was held on which commission will become the primary regulator of the crypto spot market. The competition was between the securities and exchange commission and the CFTC. This Thursday, the executive director of the blockchain association told CNBC that;
“There are 3 bills – the one this week, the Lummis Gillibrand bill, and the House bill, the digital commodity exchange act – that say the CFTC is the place to go.”
3 Bills Introduced in the Congress
3 bills have been introduced in the U.S. congress this year. These bills were introduced to make the commodity futures trading commission (CFTC) the primary regulator of the crypto spot market. The bills are as follows:
Digital Commodities Consumer Protection Act
The digital commodities consumer protection act was introduced in 2022. The senators involved were Debbie Stabenow (D-MI), John Boozman (R-AR), Cory Booker (D-NJ), and John Thune (R-SD). The CFTC will have jurisdiction over the digital spot commodities spot market. The Act will make consumers feel more secure.
Responsible Financial Innovation Act
Another act was proposed in this regard in June. U.S. Senators gave this act. The involved senators are Cynthia Lummis (R-WY) AND Kristen Gillibrand (D-NY). The name of the act was the Responsible Financial Innovation act. This act assigns the regulatory authority over digital assets spot markets to the CFTC. “The CFTC will regulate all the digital assets that meet the definition of a commodity. Digital assets like bitcoin, which compromised more than half a digital asset’s market capitalization, will be regulated by the CFTC—explained by the lawmakers in the act.
Digital Commodity Exchange Act
In April, the third bill was introduced in this regard. Reps. Ro Khanna (D-CA), Glenn “GT” Thompson (R-PA), Tom Emmer (R-MN), and Darren Soto (D-FL) proposed this act. The act was named as digital commodity exchange act.“Congress must establish a clear process for creating and trading digital commodities that prioritizes consumer protection. This will also give the process transparency and accountability. The digital commodity act will cause an increase in the foster American innovation technology job growth”.
Conclusion:
The commodity futures trading commission (CFTC) is an independent federal agency. In early times, there were no federal guidelines for crypto. Crypto was pushing federal agencies and congress to be clear in this process. They pushed them to have clear updates on the guidelines for the crypto spot market.
There was a competition between the SEC and CFTC regarding who will become the primary regulator of the crypto spot market. 3 bills were proposed in this regard. These included the plus points why the CFTC should be the primary regulator of the crypto spot market. Senators proposed different bills.
The advantage of this process of 3 bills is that this will prioritize the protection of the consumer. Their identity will be in safe hands. There will be complete transparency and accountability in this after the passing of these 3 bills.
