A bipartisan group of U.S. Senators is planning to submit legislation that would designate most digital assets as commodities and subject them to CFTC control. On Tuesday, Senators Kirsten Gillibrand (D-NY) and Cynthia Lummis (R-WY) submitted the first significant bipartisan legislation aimed at taming the crypto market’s “Wild West” nature. The bill would regulate digital assets as commodities, similar to how wheat and oil are controlled, giving the Commodity Futures Trading Commission the authority to govern the expanding digital currency sector.
Both Gillibrand, a progressive Democrat on the Senate Agriculture Committee, and Lummis, a first-term Republican on the Banking Committee, expressed gratitude for the Responsible Financial Innovation Act, which is the result of months of bipartisan cooperation in both chambers of Congress. According to CNBC, the senators stated that this proposal is a key first step in attempting to organize the markets for digital assets with long-awaited legal standards. Additionally, the legislation aims to define the large number of digital assets that are available to American investors and consumers.
The law defines digital currencies as “ancillary assets,” or intangible, fungible assets that are offered or sold in conjunction with the purchase and sale of a security, with a few exceptions. According to sources close to Gillibrand and Lummis, the proposed law will consider all digital assets as “ancillary” unless they act like a security that a company would issue to raise funds. The legislation would also prevent cryptocurrencies and other digital tokens from being treated like traditional securities by the Securities and Exchange Commission unless the person holding the cryptocurrency is entitled to the same privileges and benefits as corporate investors, such as dividends, liquidation rights, or a financial interest in the issuing entity.
The senators called the bill “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.” Lummis stated in a press release, “My home state of Wyoming has gone to great lengths to lead the nation in digital asset regulation, and I want to bring that success to the federal level. As this industry continues to grow, it is critical that Congress carefully crafts legislation that promotes innovation while protecting the consumer against bad actors.” Gillibrand claimed that the bill would “provide clarity to both industry and regulators, while also maintaining the flexibility to account for the ongoing evolution of the digital assets market.”