(Reuters) – A two-part US senator presented a bill on Tuesday that would lay down new rules for cryptocurrency and hand over the bulk of its oversight to the Commodity Futures Trading Commission.
The bill, introduced by Republican Senator Cynthia Lummis, one of Congress’ most outspoken advocates of cryptocurrency, and Democratic Senator Kirsten Gillibrand, marks one of the most ambitious efforts to date by lawmakers to place clear barriers around fast-growing and controversial cryptocurrencies.
The measure would stipulate that the CFTC, not the Securities and Exchange Commission, plays the primary role in regulating cryptocurrencies, most of which senators said work more as commodities than securities. The smaller CFTC is generally seen as a friendlier regulator of cryptocurrency, as the SEC has generally found that cryptocurrencies must comply with a variety of securities requirements.
The bill is not expected to become law in the current session of Congress, with the midterm elections just months away, but its framework could serve as a starting point for future debates on how best to monitor these markets.
“We expect this bill to be the starting point for debate next year, regardless of which party controls the House or Senate,”; wrote Jaret Seiberg, an analyst at Cowen Washington Research Group. “What matters is that there is a two-party effort to introduce crypto into the existing regulatory regime, although the details are likely to change.”
The senators said that the bill aims to provide security and clarity to crypto markets, along with consumer protection.
Among other things, the bill would lay down new rules for “stablecoins”, which are tokens intended to have their value linked to a traditional asset such as the US dollar. These products have been under significant pressure lately after a crash in the value of a high-profile stable coin, TerraUSD.
The new bill would require issuers of stablecoins to maintain high quality liquid assets commensurate with the value of all outstanding stablecoins and the publication of these holdings.