On Tuesday a bipartisan pair of U.S. senators revealed a bill that will try to establish new laws regarding cryptocurrency, and hand the bulk of their oversight to the Commodity Futures Trading Commission (CFTC).
The bill was introduced by (R) Senator Cynthia Lummis, who is considered a very vocal advocate for cryptocurrencies. Alongside her, Senator Kirsten Gillibrand, is also an advocate. The bill is a very ambitious effort to clarify the terms and boundaries regarding the wild west that is the crypto space.
The CFTC functions as a government agency concerned with monitoring and managing commodity trade in the U.S. The agency believes that cryptocurrency should be considered a commodity rather than securities. The CFTC has generally been seen as a friendlier regulator towards crypto, while the SEC has generally been harsher, believing that crypto should adhere to a host of securities requirements.
With the midterms only months away the bill won’t see much action nor become law until the next session of congress, but if passed could set a precedent for the overall attitude the government adopts towards crypto assets.
Jaret Seiberg, an analyst with Cowen Washington Research Group, has said, “We expect this bill will be the starting point for debate next year regardless of which party controls the House or the Senate,” she continues, “What does matter is that there is a bipartisan effort to bring crypto into the existing regulatory regime even if the details are likely to change.”
The senators believe that this bill will serve to clarify the boundaries around crypto and provide some stabilization to the market.
The bill will contain new rules for “stablecoins” which come at a time when these types of assets are under intense scrutiny, namely TerraUSD.
The bill aims to require stablecoin issuers viable means of liquid assets to fall back upon in the case of a failed peg, while also requiring said companies to publicly disclose those holdings.
