Senators Draft Bipartisan Bill to Regulate Digital Commodities

Senate Agriculture Committee Chair John Boozman (R-AR) and Senator Cory Booker (D-NJ) drafted legislation to expand the Commodity Futures Trading Commission’s authority over spot digital commodity markets.

The discussion draft contains several provisions, including: (i) making the CFTC the primary oversight authority for spot digital commodity markets; (ii) defining digital commodities to provide regulatory certainty; (iii) establishing registration requirements for digital commodity trading entities; (iv) adding measures for the protection of consumer funds; (v) creating safeguards to address conflicts of interest; (vi) mandating coordination between the CFTC and the SEC; (vii) protecting the rights of individuals to self-custody their digital assets; and (viii) creating a dedicated funding stream to ensure the CFTC has the resources and personnel to manage its new responsibilities effectively.

The Senators explained that the discussion draft builds upon the House-passed CLARITY Act and seeks to establish a comprehensive federal framework for regulating digital assets that function as commodities.