A new bill that gives the United States Commodities and Futures Trading Commission oversight over the crypto industry could encourage more investors to start seeing cryptocurrencies as a good investment alternative if passed to law. This, among many other effects, could spark the next wave of mass adoption of cryptocurrencies.
Several investors, especially in the corporate non-financial world, do not view crypto as a viable investment and trading product. However, quite a number have jumped since crypto became known by the masses.
Recent bipartisan legislation proposed by senators Boozeman and Stabenow may lead to an innovation-friendly federal oversight over crypto and meaningful consumer protections that could influence many more investors to join the camp, CTO & co-founder Lolli – a leading Bitcoins rewards app – Matt Senter has told ZyCrypto.
“The prospect of reasonable and fair crypto regulation has been long welcomed by many players in the industry, promising greater stability increased investor confidence, and liquidity in crypto markets,” he said.
The bill will mandate CFTC to oversee crypto because it would classify cryptocurrencies as digital commodities. As a result, CFTC would manage any account, agreement, contract, or transaction involving a digital commodity trade. It was released on Wednesday. It has not been clear so far whether the CFTC or SEC should have a mandate over these matters, with SEC essentially taking centre stage. The new bill will clarify that. It states that no security asset will be categorized as a commodity.
The increased market confidence could also boost Bitcoin and crypto prices. An oversight by CFTC could also help put into place regulation that curtails market oversaturation with fake, scammy, and hyped crypto projects which, for instance, has sparked the recent crypto bear market, said Senter. The ultimate collapse of many of these scams and hyped projects in the recent past has created unwanted trepidation towards the likes of Bitcoin, which he said has subsequently remained resilient in the face of the market downturn.
“In order to ensure the longevity and health of the crypto ecosystem and for legitimate businesses to grow and adequately plan for the future, the industry needs regulatory guardrails in place. The bill’s stated mission of closing regulatory gaps that disadvantage investors while acknowledging Bitcoin’s goal of creating accessibility in our financial system indicates its intent to facilitate mainstream adoption of Bitcoin,” he said.
The bill proposes user-based fees to fund the CFTC’s oversight, and Senter said this is good for Bitcoin.
Many people in the industry agree with this opinion because the SEC is viewed as regulating the crypto industry by way of enforcement, which has discouraged many players due to enforcement actions and fines imposed by the SEC. Not once have experts warned that this approach, as well as previous crypto bills, would stifle innovation in the crypto industry in the United States.
Meanwhile, discussions of bipartisan bills that classify stablecoins as commodities have been delayed.