WASHINGTON – U.S. Senate Committee on Agriculture, Nutrition, and Forestry Chairman John Boozman (R-AR) and Senator Cory Booker (D-NJ) released a discussion draft of legislation that would provide new authority to the Commodity Futures Trading Commission (CFTC) to regulate digital commodities. This bipartisan proposal expands upon the CLARITY Act approved by the House of Representatives in July.
“The CFTC is the right agency to regulate spot digital commodity trading, and it is essential to establish clear rules for the emerging crypto market while also protecting consumers. This discussion draft advances those goals and lays an important marker as we work toward final policy language,” Boozman said. “I appreciate Senator Booker’s partnership as we advance those objectives and create a regulatory framework to participate in this marketplace. I’m grateful for his collaboration in strengthening this proposal, and I look forward to continuing working with him, the Senate Banking Committee, and our House colleagues to deliver bipartisan legislation that protects the public, fosters innovation and allows U.S. businesses to thrive.”
“More Americans are engaging with novel financial markets and payment systems than ever before, and Congress must take steps to strengthen and expand regulatory frameworks to protect consumers from predatory practices, keep our markets safe, and prevent bad actors from exploiting regulatory gaps,” said Booker. “This bipartisan discussion draft would provide the CFTC with new authority to regulate the digital commodity spot market, create new protections for retail customers, and ensure the agency has the personnel and resources necessary to oversee this growing market.”
This bipartisan discussion draft reflects months of negotiations, incorporating agreed-upon policies and unresolved issues marked in brackets. The senators welcome feedback from stakeholders and thought leaders.
The discussion draft includes:
- A clear definition of digital commodities and the establishment of a spot market digital commodity regulatory regime with the CFTC;
- Robust consumer protections including customer fund segregation requirements, conflict of interest safeguards, appropriate customer disclosure requirements, and prohibitions on certain affiliated trading;
- A trading registration regime designed to facilitate liquid and resilient regulated markets while protecting retail participants;
- Requirements for the CFTC and SEC to coordinate and collaborate on necessary inter-agency rulemakings;
- Protections for self-custody and innovative technology; and
- A new funding stream for the CFTC to stand up a spot market regulatory regime.
Boozman is committed to working with senators and the Trump administration to ensure the CFTC has the staffing and resources to handle this expanded authority on day one.
“The CFTC plays a critical role in maintaining the integrity and stability of our financial and derivatives markets. As Congress works to expand authority for the commission to oversee the trading of digital assets that are commodities, it’s essential that we also ensure it has the tools, personnel and resources necessary to carry out this new mission, along with its current responsibilities. Strengthening this institution better protects consumers, encourages innovation, promotes transparency and upholds liquid and resilient markets,” Boozman said.
“This discussion draft is a first step, and we still have significant work to do before advancing the legislation out of committee and eventually to the Senate floor. I’m specifically concerned about the lack of resources and the bipartisan commissioners at the CFTC, preventing regulatory arbitrage, as well as the ongoing corruption of public officials and whether Congress has created the correct guardrails to prevent those misdeeds. I urge my colleagues and external stakeholders to come together to address these issues,” Booker said. “I’m grateful to Senator Boozman for his partnership and look forward to continuing to work together, with the ultimate goal of passing bipartisan legislation that will protect consumers, ensure the stability of our financial markets, and allow American businesses to flourish.”
