Representative Michael Conaway (R-Texas) introduced the Digital Commodity Exchange Act, a bill that would promote national level crypto exchanges in the country. Specifically, the legislation proposes a single framework to oversee crypto exchanges in the US. Furthermore, the representative proposed that the Commodity Futures Trading Commission (CFTC) by the regulatory authority of this framework.
If this bill becomes law, it would effectively treat all digital currency exchanges in the country as “digital commodity exchanges”. Notably, the legislation addresses the complex duality of digital currency – whether it is a currency or a commodity. The CFTC classifies BTC and Ethereum as commodities. Actually, it advocates for the creation of a separate section in the Commodities Exchange Act for digital currency like BTC and Ethereum.
The State-Federal divide in the US
The divide between individual states in the US and the Federal government on different legislations is not something new. Hopefully, the proposed Digital Commodity Exchange Act would give crypto exchanges the powers to procure a single nation-wide license, which would be effective in all states. This means that when exchanges set their operations in states, they won’t need to procure state licenses to start operating. Instead, the nation-wide license would suffice.
In the novel law, crypto exchanges would only be allowed to hold digital assets that are impossible to manipulate. However, these companies would be allowed to host ICOs.
A summary of the bill states “The proposed legislation builds on the existing commodity market practices required of Futures Commission Merchants (FCMs) to protect customer assets”.