Congress Introduces Digital Commodity Exchange Act


Key Takeaways

  • Digital Commodity Exchange Act was introduced this Thursday. This act aims to give CFTC a bigger role in overseeing crypto spot markets. 
  • The bill was introduced by Representatives Glenn Thompson, Ro Khanna, Tom Emmer, and Darren Soto. 
  • This version of the bill is an update to the one which was introduced in 2020.

A bipartisan group of senators introduced the Digital Commodity Exchange Act of 2022 on Thursday, which intends to give the Commodity Futures Trading Commission a wider role in monitoring crypto spot markets.

Representatives Glenn Thompson (R-PA), Ro Khanna (D-CA), Tom Emmer (R-MN), and Darren Soto (D-FL) introduced legislation that would define “digital commodity” and allow the CFTC to supervise companies that issue or allow people to trade these types of tokens, while the Securities and Exchange Commission (SEC) would continue to oversee tokens that are subject to U.S. securities laws. This law is an improvement to the one that was enacted in 2020.

“Congress must establish a clear mechanism for establishing and trading digital commodities that emphasizes consumer protections, openness, and accountability in order to support American innovation and tech employment growth. This bipartisan law will establish a legal framework for these developing technologies, allowing us to remain competitive with the rest of the world,” said Rep. Khanna.

 Under the DCEA, a reporting mechanism would be established for regulatory control, but would not prohibit American exchanges from operating unless they are registered. Critics contend that this alternative could result in loopholes, potentially becoming a stumbling block. 

The DCEA “supplements and augments present power for the CFTC and the Securities and Exchange Commission,” according to Thompson’s press release, and it “contributes to removing regulatory loopholes that have encouraged market confusion and impeded innovation in the United States.”

Many bitcoin-related bills have been introduced in Congress, indicating broader, more widespread acceptance. Despite the fact that several of these bills have already been introduced, the momentum for legislation is growing. ETFs that invest in cryptocurrencies, such as the VanEck Digital Transformation ETF (DAPP), which invests in digital infrastructure that supports cryptocurrencies, such as exchanges and miners, are likely to benefit from smart regulation. Investing in miners and cryptocurrency stocks is the objective of the VanEck Digital Assets Mining ETF (DAM). 

The VanEck Bitcoin Strategy ETF (XBTF) is a bitcoin futures fund with a one-of-a-kind structure that makes use of C-corp status to maximize long-term tax efficiency.

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