A new digital commodity law under discussion in the U.S. legislature would place the CFTC at the helm of trying to please crypto in a whole new way.
But a lot of people who understand Satoshi’s original vision say that won’t work.
To understand what’s being discussed, look at the given definition of a digital commodity under the new proposed law as mentioned in coverage by Nikhilish De at Coindesk.
“The Digital Commodity Exchange Act of 2022 (DCEA), introduced Thursday by representatives Glenn Thompson (R-Pa.), Ro Khanna (D-Calif.) Tom Emmer (R-Minn.) and Darren Soto (D-Fla.), would create a definition for “digital commodity” and allow the CFTC to oversee companies issuing or letting people trade these types of tokens, while having the Securities and Exchange Commission (SEC) continue to oversee tokens that fall under U.S. securities laws,” De writes.
Essentially, the ‘digital commodity’ would be anything that is decentralized – that can be sent over a peer to peer network without an intermediary.
That’s what makes this idea that the government can and should track these assets so infuriatingly weird.
Part of the decentralized nature of Bitcoin and other true cryptocurrencies is their resistance to centralized control and tracking. That was baked into the concept from the very time that Satoshi mined the Genesis block.
The new law would restrict such commodities to registered exchanges and custodial systems.
It sounds like it would effectively try to ban noncustodial cold wallets.
For a cogent explanation of the futility here, we’ll turn to this offering from The Shrimpy.
“At the core of the rumored regulations is what appears to be a bank-centric push to force all current and future cryptocurrency users toward intermediary platforms,” writes an unnamed contributor, describing a similar push late last year. “What this means for you is, if the rumors are true, you will need to share KYC information (identification data) with exchanges you use before withdrawing or depositing from your self-hosted wallet. This push will make it so your currently anonymous crypto wallet will be inextricably linked to your real-world identity. OK — so there go crypto wallets, right? You might as well delete your Exodus wallet, shut down the MetaMask, and turn everything over to the bankers lying in wait. Wrong. Try as they might, there is simply no way to enforce data collection on the use of non-custodial wallets. Such regulations appear more symbolic than anything else — they might scare newbies looking to enter the market discreetly, but anyone who understands how cryptocurrency storage works, especially when using hardware wallets, knows there are options outside of centralized exchanges.”
All of that considered, the regulatory agencies may have to go back to the drawing board.
