Senators want to classify bitcoin as a ‘digital commodity’

Last Updated: 7 August 2022

The US Senate Agriculture Committee (SAC) plans to introduce a bill classifying bitcoin as a digital commodity.

Digital commodity

This category is fairly new. The question of what exactly bitcoin is has been around for years. Does it fall under securities laws; is it a commodity, or is it in a class of its own?

Currently, the Commodity Futures Trading Commission (CFTC) oversees the regulation of commodity derivatives rather than the underlying commodity itself. On the other hand, the SEC has so far focused mainly on crypto-currencies.

With the bill, SAC wants the CFTC to also regulate the spot market for digital commodities. This means that the regulator will also have responsibility for trading in the underlying commodity — that is, Bitcoin. At least, that is the idea of this proposal.

No securities

The bill also excludes securities from being designated as a digital commodity at the same time. Therefore, all cryptocurrencies that are labelled as a security will fall under the jurisdiction of the Securities and Exchange Commission (SEC) instead of the CFTC. Therefore, the SEC will mainly focus on crypto exchanges as securities exchanges.

Better definitions for brokers, dealers, custodians, and similar parties are also needed.

SAC Chairwoman Debbie Stabenow and Republican John Boozman, want to introduce the bill as soon as possible. CFTC chairman Rostin Behnam states that the regulator is ready for this step.

Therefore, it is a bill, a bill. This means that it is not (yet) a law that will be implemented.

Author
  • Gabriele Spapperi

    Gabriele Spapperi is a veteran cryptocurrency investor and blockchain technology specialist. He became fascinated with Bitcoin and distributed ledgers while studying computer science at MIT in 2011.

    Since 2013, Gabriele has actively traded major cryptocurrencies and identified early-stage projects to invest in. He contributes articles to leading fintech publications sharing his insights on blockchain technology, crypto markets, and trading strategies.

    With over a decade of experience in the crypto space, Gabriele provides reliable insights and analysis on the latest developments in digital assets and blockchain platforms. When he's not analyzing crypto markets, Gabriele enjoys travel, golf, and fine wine. He currently resides in Austin, Texas.

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