On Thursday, a bipartisan group of lawmakers introduced the Digital Commodity Exchange Act of 2022, which aims to give the Commodity Futures Trading Commission a bigger role in overseeing crypto spot markets.
The bill was put forward by representatives Glenn Thompson (R-PA), Ro Khanna (D-CA), Tom Emmer (R-MN), and Darren Soto (D-FL) and would create a definition for “digital commodity” and allow the CFTC to oversee companies issuing or letting people trade these types of tokens, while having the Securities and Exchange Commission (SEC) continue to oversee tokens that fall under U.S. securities laws. This version of the bill is an update from one introduced in 2020.
Co-sponsor Ro Khanna noted, “To foster American innovation and tech job growth, Congress must establish a clear process for creating and trading digital commodities that prioritizes consumer protections, transparency and accountability.”
The DCEA would create a reporting regime that would allow for regulatory oversight but would not bar exchanges from operating in the U.S. without registration. Critics of the bill say that this option could create loopholes, creating a potential sticking point. In Thompson’s announcement of the bill he noted, “the DCEA builds upon and is complimentary to existing authorities for the CFTC and the Securities and Exchange Commission. It helps to close the regulatory gaps that have created uncertainty in the marketplace and discouraged innovation in the United States.”
Congress has introduced many bills on cryptocurrency, further indicating broader, more mainstream acceptance. Though many of these bills have been tabled, momentum for legislation is growing. Smart regulation could lift a number of crypto-adjacent ETFs, including the VanEck Digital Transformation ETF (DAPP), which centers on the digital infrastructure that makes cryptocurrencies possible, including exchanges and miners. The VanEck Digital Assets Mining ETF (DAM) puts a greater emphasis on miners and crypto equities. The VanEck Bitcoin Strategy ETF (XBTF) offers a unique structure for a bitcoin futures fund that utilizes a C-corp status for greater long-term tax efficiency.
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