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Market News U.S. Senators Unveil Bill to Regulate Cryptocurrency

U.S. Senators Unveil Bill to Regulate Cryptocurrency

On Tuesday, a bipartisan pair of US senators proposed a measure that would create new cryptocurrency laws and delegate the majority of monitoring to the Commodity Futures Trading Commission (CFTC).

Cory Russell
2022-06-08
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The measure, proposed by Republican Senator Cynthia Lummis and Democratic Senator Kirsten Gillibrand, is one of the most ambitious attempts yet by politicians to put explicit guardrails around the quickly developing and contentious cryptocurrency marketplaces.


The bill would make the CFTC, not the Securities and Exchange Commission, the main regulator of crypto goods, which, according to the senators, function more like commodities than securities. The CFTC is seen to be a friendlier regulator for cryptocurrencies than the SEC, which has concluded that crypto goods must comply with a slew of securities regulations.


With the November elections only months away, the measure is unlikely to pass this session of Congress, but its design might serve as a starting point for future deliberations about how to effectively regulate such markets.


"Regardless of whatever party controls the House or the Senate next year, we anticipate this measure to be the starting point for discussion," stated Cowen Washington Research Group analyst Jaret Seiberg. "What matters is that there is a bipartisan attempt to include cryptocurrency into the current regulatory framework, even if the specifics are likely to alter."


The initiative, according to the senators, aims to provide crypto markets with certainty and transparency, as well as consumer safeguards.


The law would, among other things, create new restrictions for "stablecoins," which are tokens whose value is tied to a conventional asset such as the US dollar. Following a drop in the value of a well-known stablecoin, TerraUSD, such items have been under a lot of pressure recently.


Stablecoin issuers would be required to keep high-quality liquid assets equivalent to the value of all existing stablecoins, as well as public disclosures of their holdings, under the proposed measure.

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