House Agriculture Committee ranking member Michael Conaway (R., Texas) introduced the Digital Commodity Exchange Act of 2020 -- legislation that creates a single, national, opt-in regulatory framework for digital commodity trading platforms under the jurisdiction of the Commodity Futures Trading Commission (CFTC).
“The Digital Commodity Exchange Act provides a clear path forward to improve the regulation of digital commodities. Digital commodity trading platforms are currently required to comply with a complicated labyrinth of 53 state and territory regulatory frameworks, hindering the ability for newcomers to enter the market,” Conaway said, adding that his bill “provides responsible federal oversight of trading platforms and critical consumer protections while also paving the way for innovators to develop new digital commodity projects.”
Rep. Tom Emmer (R., Minn.) said, “America is the home of innovation and the entrepreneurial spirit. I am proud to sign on as a co-sponsor of the Digital Commodity Exchange Act to support these foundational principles that our nation should always foster. Digital commodity projects should be encouraged, not hindered, by unclear rules of the road. We are holding our innovators back by not providing regulatory clarity, and ranking member Conaway’s bill will provide much-needed consumer protection while ensuring the growth of these emerging technologies.”
That innovation often outpaces the federal regulatory environment, added co-sponsor Rep. Rep. Dusty Johnson (R., S.D.), who serves as ranking member on the House Agriculture Committee's nutrition, oversight and department operations subcommittee. “The Digital Commodity Exchange Act ensures Americans can have confidence in emerging financial tools. This bill offers necessary protections without stifling the creativity of new market commodity tokens.”
Another co-sponsor, Rep. Austin Scott (R., Ga.), said the legislation will help provide a better understanding of how emerging technologies such as blockchain can promote public policy that fosters, rather than inhibits, the growth of the financial technology (fin tech) sector in the U.S.
Blockchain Caucus co-chair Rep. Darren Soto (D., Fla.), another original co-sponsor of the bill, said, “Regulatory clarity is critical for digital commodity markets to promote innovation and consumer protection. Innovators are spending up to 50% of startup costs on legal fees because of the current regulatory ambiguity between what is a security and what is a commodity. That’s why the Digital Commodity Exchange Act will provide the necessary consumer protections, responsible federal oversight and regulatory clarity for all participating in digital commodity markets.”
Industry groups also offered their support. Jerry Brito, executive director of the Coin Center, said, “This bill is a win-win. Innovators and entrepreneurs get greater clarity and more regulatory options, while investors benefit from increased supervision of markets.”
Kristin Smith, executive director of the Blockchain Assn., stated: “We’re proud to support the introduction of the Digital Commodity Exchange Act and the Securities Clarity Act. Together, these efforts will help clarify outstanding issues related to when and how securities laws and commodities regulations apply to digital assets. Uncertainty over the application of these rules of the road continues to act as a strong headwind for the crypto ecosystem. These bills would do much to clarify the situation and put into law pro-growth policies for the crypto economy.”
“I’m excited by the support this bipartisan legislation has received in Congress and from those in the industry," Conaway added. "I look forward to developing a legal framework and providing clarity for fin tech innovators and strong protections for users of digital commodities.”