The US Senate Agriculture Committee has drafted a new bill aimed at regulating the cryptocurrency asset market.
The bill is an early-stage proposal that defines the Commodity Futures Trading Commission's (CFTC) authority over digital commodities. To become law, it must first pass committee review, then be reconciled with the Senate Banking Committee, and finally be voted on in both the Senate and the House of Representatives.
The draft bill officially designates Bitcoin (BTC) and Ethereum (ETH) as “digital commodities.” These assets will now fall under the CFTC's jurisdiction and will no longer be considered securities. Analysts predict this development could lead to a two-tiered market structure: regulated tokens attract institutional fund flows, while the rest remain at the margins.
The new draft positioned the CFTC as the regulatory authority over both spot and derivatives markets. This would place spot cryptocurrency trading under a federal framework, similar to the existing futures market. The SEC's absence from the draft, however, is seen by some commentators as a reaction to the agency's “overly interventionist” stance in previous periods.
The bill would require crypto companies to separate their exchange, brokerage, custodian, and trading desk operations. This regulation aims to end the “all-in-one” model similar to FTX. Customer assets would be required to be held only in qualified custodians regulated by federal or state levels.
Registered exchanges will only be able to list digital assets that are “not susceptible to manipulation.” This provision will make it particularly difficult to list memecoins and reduce scams like “rug pull.” Brokerage firms will also be required to comply with CFTC registration, independent auditing, and anti-money laundering and terrorist financing requirements. Experts believe many tokens on major exchanges like Coinbase may not meet these standards.
The new regulation leaves the issue of decentralized finance (DeFi) to future regulations. Stablecoins, however, will be covered under the separate “GENIUS Act.” No changes have been made to tax regulations; digital commodities will still be taxed as “property” by the IRS.
*This is not investment advice.
