A new United States draft bill has proposed a single framework to oversee the cryptocurrency exchanges in the country, making the Commodity Futures Trading Commission (CFTC) their regulator.
Dubbed the Digital Commodity Exchange Act of 2020, the bill was introduced on Thursday by Representative, Michael Conaway (R-Texas), a ranking member of the House Committee on Agriculture.
The proposed legislation is unique in the United States as it categorized all digital currency exchanges operating in the country separately as ‘digital commodity exchanges’. Earlier bills stressed on properly defining digital currencies.
The CFTC looks at Bitcoin and Etherueum as commodities and already regulate the derivatives market of these digital assets. The new bill creates a separate category for these decade-old assets under the Commodities Exchange Act, but their definition would be similar to commodities.
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Circumventing State Permissions
Currently, the crypto exchanges willing to operate in the United States have to seek state money transmission licenses. If the new bill is passed, they can legally offer their services by obtaining a single nation-wide license.
However, the proposals of the bill are not binding on any of the exchanges, hence, they can choose to approach individual states for licenses. It is to be noted that the exchanges need to obtain the existing permissions from the CFTC if they want to list the derivatives.
Meanwhile, the bill specified that the exchanges would only be allowed to list digital assets that are not susceptible to manipulation. But, they can still hold certain types of initial coin offerings (ICOs).
“The proposed legislation builds on the existing commodity market practices required of Futures Commission Merchants (FCMs) to protect customer assets,” a summary of the bill stated. “DCEs would be required to segregate customer assets and hold them in separately regulated entities which are licensed to custody digital assets.”