The U.S. Senate has introduced a significant bipartisan draft that aims to expand the authority of the Commodity Futures Trading Commission (CFTC) to oversee spot market trading of digital commodities, including Bitcoin and other non-security tokens. This proposal, led by Senator John Boozman and Senator Cory Booker, marks a critical step towards establishing a more robust regulatory framework for the cryptocurrency market.
This legislative effort defines digital commodities as fungible assets recorded on secure public blockchains, allowing for transferability without the need for intermediaries. The Senate considers the CFTC the suitable regulatory body to ensure consumer protection and market stability, seeking to address existing regulatory gaps.
The draft specifies that a new funding stream will be created for the CFTC to manage its extended responsibilities effectively. The proposed spot-market regime is set to come into effect 270 days after the bill”s enactment, with a transition period allowing current operators to continue their activities while they pursue registration.
The Agriculture Committee has a long-standing history with commodity regulation, dating back to the early 20th century. The committee”s authority has evolved over the decades, with significant legislative milestones including the Grain Futures Act of 1922 and the Commodity Exchange Act of 1936. Currently, the CFTC regulates derivatives associated with crypto assets but does not oversee their direct trading. This proposal aims to extend the CFTC”s regulatory scope to encompass spot markets, where the majority of retail trading occurs.
In a complementary move, the U.S. Department of the Treasury and the Internal Revenue Service have released new regulatory guidance that allows cryptocurrency exchange-traded products (ETPs) to stake their underlying digital assets. This update enables ETPs to distribute staking rewards directly to retail investors, a shift from previous restrictions that limited ETPs to merely holding assets without the ability to earn on-chain yields.
The recent guidance is expected to stimulate institutional participation, increasing demand for staking-related funds. This development comes at a time when the ongoing 41-day shutdown of the U.S. government is nearing resolution, with a bipartisan procedural vote passed to facilitate a compromise that could reopen the government shortly. As a result, the cryptocurrency market has shown signs of recovery, with major assets such as Ethereum, Solana, and Avalanche experiencing gains after recent losses.
Analysts believe that the Treasury”s new staking provisions could lead to an influx of capital into staking-centered funds, potentially reshaping U.S. cryptocurrency investment offerings. The Senate”s plans to release the crypto market bill this week are anticipated to provide much-needed clarity to digital asset regulations, thereby enhancing investor confidence across the sector.
