How The New Us Crypto Bill Could Finally Define Commodities And...

Since its inception, the US cryptocurrency industry has faced a regulatory challenge: determining when a digital asset qualifies as a security and when it qualifies as a commodity.

This uncertainty has hindered institutional adoption, fueled legal disputes and made it difficult for crypto companies to interpret complex rules. But a draft bill from the Senate Agriculture Committee, led by Chair John Boozman and Senator Cory Booker, proposes changes that may address this.

The bill is part of a broader effort to establish a unified framework for digital asset markets. The bipartisan discussion draft outlines how the US could classify crypto assets and assign oversight responsibilities. It marks a significant step toward settling the long-running debate over whether crypto assets are commodities or securities.

Crypto projects in the US have long been unsure whether they need to register with the Securities and Exchange Commission. Trading platforms have struggled to determine what tokens require securities licenses. Institutional investors have held back because compliance expectations are unclear. And regular crypto traders have faced a fragmented market with inconsistent protections.

The proposal aims to establish a clear federal distinction between digital commodities and digital securities.

Did you know? In 2019, when Facebook announced its Libra project (later renamed Diem), global regulators reacted quickly. G7 ministers, central banks and the US Congress raised concerns that a private company could create a global currency. The backlash became a turning point for stablecoin regulation worldwide. The project was eventually shut down in January 2022.

The draft bill introduces a major new concept: the digital commodity. Under this plan, coins such as Bitcoin (BTC) and Ether (ETH) would be classified as digital commodities.

A digital commodity is essentially an interchangeable token. You can fully own it and transfer it directly to someone else without an intermediary. It is recorded on a public, cryptographically secured blockchain. Under the bill, these digital commodities would fall under the Commodity Futures Trading Commission (CFTC) rather than the SEC.

Here’s how the concept of a digital commodity could change the scenario:

Clear rules for big investors: If certain coins are officially labeled digital commodities, banks, funds and trustees could hold them without risking federal violations.

Source: CoinTelegraph