U.S. Senate Committee on Agriculture, Nutrition, and Forestry Chairman John Boozman (R-AR) and Senator Cory Booker (D-NJ) have introduced a bipartisan discussion draft of legislation aimed at granting new regulatory powers to the Commodity Futures Trading Commission (CFTC) over digital commodities. The proposed measure builds on the CLARITY Act, which was passed by the House of Representatives in July.
Boozman emphasized the importance of establishing clear rules for digital commodity markets and ensuring consumer protection. "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."
Booker highlighted the growing involvement of Americans in new financial markets and called for updated regulations. "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."
The draft reflects several months of negotiations between lawmakers, including both agreed-upon policies and outstanding issues yet to be resolved. The senators are seeking input from stakeholders on these points.
Key elements of the draft include defining digital commodities clearly; setting up a spot market regulatory regime under CFTC oversight; implementing consumer protections such as fund segregation requirements, conflict-of-interest safeguards, disclosure mandates, and prohibitions on certain affiliated trading; establishing a registration system for trading entities; requiring coordination between CFTC and SEC; protecting self-custody rights; supporting technological innovation; and creating a dedicated funding stream for CFTC's expanded role.
Boozman stated his intention to collaborate with other senators as well as officials from the Trump administration to ensure that CFTC receives adequate staffing and resources.
"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.
Booker noted that further work is needed before moving forward: "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."
