US Senate Propose Bill Classify Cryptos as Commodities Like Oil

Members of the Senate Council of the United States are proposing a bill to classify digital assets as commodities like wheat, oil, or steel. By implication, the bulk of the oversight responsibility will be in the hands of the Commodity Futures Trading Commission (CFTC) and not the Securities and Exchange Commission (SEC).

This revelation came via a report from the Consumer News and Business Channel (CNBC) published on June 7, 2022.

The bill, titled the Responsible Financial Innovation Act, is sponsored by Senators Kirsten Gillibrand and Cynthia Lummis.

Gillibrand and Lummis are members of the Senate Committee on Agriculture and Banking. They said the legislation is a result of months of collaboration in the House and Senate. Therefore, the legislation represents a first attempt to structure the markets for digital assets with long-awaited legal definitions.

Lummis said in a press release:

As this industry continues to grow, it is critical that Congress carefully crafts legislation that promotes innovation while protecting the consumer against bad actors. The Lummis-Gillibrand framework will provide clarity to both industry and regulators while also maintaining the flexibility to account for the ongoing evolution of the digital assets market.

The bill designates digital currencies as ancillary assets or intangible, fungible assets that are offered or sold jointly with a purchase and sale of a security.

The CNBC report further states that cryptocurrencies will be treated differently from traditional securities under SEC scrutiny unless a crypto holder is granted the privileges corporate investors enjoy.

The CFTC and SEC together are powerful watchdogs in the US market. While the CFTC regulates the purchase and sale of raw commodities wheat, oil, or steel, the SEC oversees the activities of companies or bodies that seek to raise capital from the public.