To be a commodity, or a security, that is the question.
Four members of the Congressional Blockchain Caucus are leading the crypto-as-a-commodity charge beginning with Representative Glenn “GT” Thompson (R, PA), who is the Ranking Member of the House Agriculture Committee, along with co-sponsors Rep. Ro Khanna (D, CA), Rep. Darren Soto (D, FL) and Rep. Tom Emmer (R, MN).
H.R. Bill 7614, which was referred to the House Ag Committee, aims to assign responsibility for crypto exchanges with the Commodity Futures Trading Commission (CFTC) rather than the Securities and Exchange Commission where exchanges tradable assets would therefore be associated with securities.
Highlights from the bill:
“(i) IN GENERAL.—Subject to sections 6d and 12(e), the Commission shall have exclusive jurisdiction over any agreement, contract, or transaction involving a contract of sale of a digital commodity in interstate commerce.”
The regulations and cost with a securities designation would inhibit crypto growth and innovation according to proponents. That said, approval of each new digital currency classified as commodity will need CFTC approval before its rolled out on an exchange.”
Also, later in the bill:
“REPORTING REQUIREMENTS. -“
“(A) DUTY OF DIGITAL COMMODITY EXCHANGE.—Each digital commodity exchange shall provide to the Commission all information that is determined by the Commission to be necessary to perform each responsibility of the Commission under this Act.”
Also of note in the bill, there is never a mention of the word “cryptocurrency” or “crypto” in H.R. 7614 – it’s identified as a “digital commodity.” The roots of this is the Commodity Exchange Act from 1936 which was decades-later applied to Bitcoin, for example, and its commodity attributes (PDF).
Decrypt covered the press conference for the introduction of the bill where congressman Rep. Khanna echoed the clarion call coming from the blockchain industry: “No one is asking for different rules. They’re just asking to understand what the rules are.”
Hopes are that this legislation can be powered through committee and house approval and then link up with a yet-to-be launched parallel effort in the Senate. The Block notes that CFTC Chair Rostin Benham has received a degree of acceptance to themes represented by the House Ag initiative from Senate Agriculture Committee members.
Blockchain Association director of government relations, Ron Hammond, prognosticated on Monday, “This week in Congress and crypto: One theme that will dominate the next year of crypto policy is the jurisdictional battle between Ag/CFTC and Banking/SEC. There are many views on the matter ranging from complete jurisdiction, a split reg regime and an SRO. So which will it be…” Read the entire thread on the possibilities.
Hammond points out that policies and the power to make them will adjust with the political winds -particularly if Republicans take back Congress in the fall.