Crypto Gets Its First Big Rulebook in Decades
The U.S. Senate has taken a significant step in regulating cryptocurrencies with a new draft bill aimed at bringing clarity to the crypto market. The bill empowers the Commodity Futures Trading Commission (CFTC) with greater authority, marking the first time the U.S. is attempting to clearly define regulatory oversight in the crypto world.
Key Provisions of the Bill
- Classification of Cryptocurrencies: The bill classifies major cryptocurrencies like Bitcoin and Ethereum as digital commodities, placing them under CFTC supervision.
- Separation of Functions: Crypto exchanges will be required to separate their trading, custody, and brokerage functions, similar to banking rules from the Glass-Steagall era.
- Prevention of Market Manipulation: The bill mandates that exchanges only list tokens that are difficult to manipulate, potentially preventing scams like rug pulls and wash trading.
Bipartisan Support and Industry Reaction
The bill has garnered support from both Democrats and Republicans, with the White House also backing it. Banking executives, such as Brian Moynihan from Bank of America, believe that clear regulations will encourage more banks to enter the crypto space.
Next Steps and Criticisms
Currently, the draft is set to merge with another draft from the Senate Banking Committee. The combined bill could significantly shape how crypto interacts with U.S. financial markets for years to come.
Critics argue that while the bill is a good start, it may not go far enough in protecting consumers. Others express concerns that it could stifle innovation. Nevertheless, it is clear that the U.S. is making strides to bring crypto into the regulatory fold.
