Another bipartisan group of lawmakers have introduced the Digital Commodities Consumer Protection Act of 2022 to establish a “mandatory” framework to regulate popular cryptocurrencies like Bitcoin and Ether.
This legislation is co-sponsored by Senators Debbie Stabenow (D-MI) and John Boozman (R-AR), who serve on the Senate Agriculture, Nutrition, and Forestry Committee.
Their bill, if passed, would give the Commodity Futures Trading Commission (CFTC) “new tools and authorities to regulate digital commodities”—specifically brokers, dealers, custodians, and trading facilities. They claim this “mandatory” framework safeguards customers and markets.
Coin Center, a nonprofit defending the rights of individuals to build and use free and open cryptocurrency networks, expressed concerns about the mandatory framework provision citing threats to innovation and constitutional rights to speech and privacy:
The Senate version puts forth more regulated categories than merely exchanges; it regulates brokers, dealers, custodians, and trading facilities, each of which is defined. Additionally, the regime proposed in the Senate is not optional. If you meet the definition of any of these categories of “digital commodity platforms” you must register or face penalties. There is a serious risk of overreach and unintended consequences when registration is mandatory rather than optional.
The second bill comes after the Responsible Financial Innovation Act (S.4356) was introduced by Sens. Lummis (R-WY) and Gillibrand (D-NY) in June. Unlike this newly-introduced bill, the Lummis-Gillibrand bill doesn’t create a “mandatory” framework. Instead, it would create a “regulatory sandbox for state and federal regulators to collaborate on innovative financial technologies” in a controlled environment.
It’s been reported that a third cryptocurrency bill is in the works from House Financial Services Committee Chair Rep. Maxine Waters (D-CA) and Ranking Member Rep. Patrick McHenry (R-NC). The Waters-McHenry version is expected to grant primary regulatory oversight to the Securities and Exchange Commission (SEC).
As the Democrat-led SEC majority weighs cracking down on digital currencies, Congress can offer greater clarification on cryptocurrency frameworks that protects consumers and businesses from burdensome regulations.
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