U.S. Senate Push for Crypto to be Treated like Gold in New Bill
U.S. Senators propose a new crypto bill aiming to regulate digital assets like commodities, not securities, in a bid to boost fintech growth.
On July 12, Senators Cynthia Lummis and Kirsten Gillibrand plan to introduce a revised crypto bill called the "Responsible Financial Innovation Act". This bill aims to treat most crypto assets like gold, which are classified as commodities.
The goal is to put them under the control of the Commodities Futures Trading Commission (CFTC), not the Securities and Exchange Commission (SEC). The senators believe the SEC is slowing down the growth of financial technology.
The SEC wants to use old laws to control crypto companies like banks and stock exchanges. Senator Lummis believes that this approach is not fair.
The new bill aims to protect investors and avoid the big failures that hurt the industry in 2022. It does not support the SEC's approach of suing companies or freezing their assets.
The revised bill will also require crypto exchanges to store customer money in third-party trusts. It also wants to stop exchanges from trading with their own money or tokens. The CFTC will have the power to oversee any wrongdoings by exchange affiliates.
The bill also bans "rehypothecation," which is the practice of using digital assets that are already in other loans to get financing.
The bill has already been sent to the CFTC and SEC for their review. However, Senator Lummis is worried that they may reject it.
The U.S. is already behind the rest of the world in terms of crypto regulations. As a result, many talented people and innovative companies are leaving the country.
While the crypto market would benefit from new laws in the U.S., the market's mood and trading volumes are currently low. The total value of the market is still at $1.23 trillion, with little change from the major coins over the past 24 hours.
