he proposed plan would give sole authority in the regulation of spot markets for such digital commodities as Bitcoin and Ethereum to the Commodity Futures Trading Commission (CFTC).
Key Proposal Details
It plans to give the CFTC jurisdiction over digital commodity spot markets which currently accounts for about 70 percent of the global cryptocurrency market. Such an approach would help to resolve the existing legal vagueness of crypto transactions regulation.
Motivation and Background
Republican legislators have long condemned the aggressive stance from the SEC towards cryptocurrencies. The CFTC is seen as more innovation friendly and this is evident from the former CFTC chairman Chris Giancarlo.
Challenges Ahead
Thus, the proposal is not without challenges such as the approval of Congress and great funding increase. The current budget of CFTC is $ 400 million while that of SEC is $ 2.4 billion.
Industry Implications
The change has been welcomed by the crypto community, though there are concerns about interference with the regulation of already existing commodity markets. One may refer to the proposed change as a pivotal moment in the regulation of digital assets.
Future Outlook
The effectiveness of this approach of regulation can be seen in the close association between legislative drafting and the capacity to balance innovation with market protection.
