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The Commodity Futures Trading Commission (CFTC) would be given supervision power over the booming cryptocurrency industry under bipartisan legislation proposed on Thursday.
The Digital Commodity Exchange Act is a reworked version of legislation filed in 2020, according to tech and government conduit platform NextGov.com. It would define digital commodities and provide the CFTC authority to oversee spot digital commodity exchanges, market intermediaries, and stablecoin suppliers on a regular basis.
“To foster American innovation and tech job growth, Congress must establish a clear process for creating and trading digital commodities that prioritizes consumer protections, transparency and accountability,” according Rep. Ro Khanna, D-Calif. Bill cosponsors include Rep. Glenn Thompson, R-Pa., Tom Emmer, R-Minn., and Darren Soto, D-Fla.
Under the proposed act, if “digital commodity” exchanges seek to provide leveraged trading or list for sale digital commodities given to people before they are accessible to the general public, exchanges would be obliged to register with the CFTC.
The law “authorizes the CFTC to register and regulate trading venues providing spot or cash digital commodity markets as digital commodity exchanges,” according to the legislation.
Spot markets provide commodities, such as bitcoin, with quick delivery.
The bill also mandates that registered digital commodity exchanges monitor trading activity, prohibit abusive trading practices, establish minimum capital requirements, publicly report specified trading information, avoid conflicts of interest, establish governance boards, and practice cybersecurity.
Some crypto sector analysts say the legislation will at least provide clarity to uncertain practices.
“Cryptoexchanges will want a seat at the table here,” noted industry player copper.co about an earlier incarnation of the bill. “An exacting regulatory framework will be costly, but not as expensive and troubling as not having one in the first place. Certainty, laid down in black and white, is better than dealing with uncertainty.”
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