The Republican chairs of the two House of Representatives committees have proposed a bill that could provide a path for crypto exchanges to register with the US Securities and Exchange Commission (SEC). If passed, the bill would allow crypto exchanges to trade digital securities, commodities, and stablecoins all in one place. The proposed legislation would also provide clarity on the question of what is a commodity and what is a security, with the SEC retaining the power to determine which assets are securities.
For some crypto platforms, though, the designations of which bucket each asset fits into could become less important, because an SEC-registered crypto exchange—labeled as an alternative trading system (ATS)—would have the ability to set up trading in stablecoins and commodities, as well, said the draft bill.
The bill would also set up a new category of registered business: a digital commodity exchange, where certified crypto commodities would trade. The new exchanges would have to comply with the agency’s usual protections and ensure they’re not vulnerable to market manipulation.
At this stage, the legislation doesn’t include any appropriations, meaning the SEC and CFTC aren’t given a new heap of cash for the tremendous increase in work. The bill now becomes part of a much larger negotiation, not just with House Democrats and the Senate, but also over how it fits with the other major congressional crypto effort this year.