A new bill, which according to Wall Street Journal and Bitcoin Magazine is being introduced today, seeks to classify bitcoin as digital commodity and make the U.S. Commodities Futures Trading Commission (CFTC) responsible for overseeing it.
The chair of the Securities and Exchange Commission (SEC) Gary Gensler has long talked about bitcoin being a commodity and not a security. At the same time, the SEC is currently looking into Coinbase on the basis of listing unregistered securities.
These statements by the SEC about bitcoin as well as their requests for exchanges like Coinbase to register as National Securities Exchanges, topped by their current probe into Coinbase, shows that the controversy surrounding which digital assets are commodities versus securities is heating up.
The new bill, introduced by Senate Agriculture Committee (SAC) Chairwoman Debbie Stabenow and leading Republican John Boozman, seeks to classify Bitcoin and Ethereum as digital commodities.
The bill would furthermore exclude securities from simultaneously being classified as digital commodities. An asset can be a security or a digital commodity, but not both at the same time.
This could have far-reaching implications for bitcoin and the crypto industry. If Bitcoin and Ethereum are classified as digital commodities while the other 18,000 something altcoins aren’t, this would mean than any U.S. crypto exchange that lists coins other than Bitcoin and Ethereum would have to register as a National Securities Exchange.
It would also mean that Bitcoin and Ethereum are regulated by the CFTC while all other altcoins are under the oversight of the SEC. This would lead to two completely separate regulatory frameworks, including different tax treatment for Bitcoin, Ethereum and other altcoins.
Last month, the CFTC made news with the launch of its new Office of Technology Innovation, which is an effort to leave the “sandbox” stage of researching digital commodities and actually beginning to seriously oversee and regulate the market.
The new bill put forward by the Senate Agriculture Committee also aims to exempt bitcoin miners from being classified as brokers. A similar effort is being made by Senators Pat Toomey, Cynthia Lummis, Rob Portman, Kyrsten Sinema and Mark Warner this week.
