WASHINGTON—A new bipartisan proposal from Sens. John Boozman (R-AR) and Cory Booker (D-NJ) would give the Commodity Futures Trading Commission sweeping new authority to regulate digital commodities, establishing the first federal framework for spot-market crypto trading and enhancing consumer protections.
The discussion draft—building on the House-passed CLARITY Act—would define digital commodities in law, create registration and disclosure requirements for trading platforms, mandate coordination between the CFTC and SEC, and fund the agency’s expanded oversight to safeguard investors while fostering innovation.
“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 in a release. “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.”
“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 in a statement. “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 legislators said the bipartisan discussion draft reflects months of negotiations, incorporating agreed-upon policies and unresolved issues marked in brackets. The senators welcome feedback from stakeholders and thought leaders.
The discussion draft includes:
- A clear definition of digital commodities and the establishment of a spot market digital commodity regulatory regime with the CFTC
- Robust consumer protections including customer fund segregation requirements, conflict of interest safeguards, appropriate customer disclosure requirements, and prohibitions on certain affiliated trading
- A trading registration regime designed to facilitate liquid and resilient regulated markets while protecting retail participants
- Requirements for the CFTC and SEC to coordinate and collaborate on necessary inter-agency rulemakings
- Protections for self-custody and innovative technology
- A new funding stream for the CFTC to stand up a spot market regulatory regime.
DCUC Reaction
“The bipartisan discussion draft...represents a critical moment for the financial marketplace. As the credit union system — and especially those serving the defense, military, veteran and family communities — prepare for a future in which digital assets increasingly matter, clear, fair and consumer-centered regulation is essential," said DCUC Chief Advocacy Officer Jason Stverak.
Stverak said DCUC believes this proposal holds significant promise in a number of areas:
- By defining digital commodities and assigning regulatory oversight, the draft helps reduce the regulatory uncertainty that has hampered innovation and raised risks to consumers
- By mandating registration and disclosure requirements for trading platforms and requiring coordination between the CFTC and the Securities and Exchange Commission, the draft acknowledges the need for systemic integrity, investor protection and inter-agency clarity
- Importantly for credit unions and the members we serve, the framework contains checkboxes around consumer protections: fund segregation, conflict-of-interest safeguards, disclosures, and oversight of affiliated trading. These elements are right-sized toward improving fairness, transparency, and security
Stverak added that the trade group also underscores several considerations that must be addressed as Congress finalizes policy:
- Regulatory parity and fairness for credit unions. Credit unions play a unique role in serving military – affiliated members, veterans, and families. Any regulatory regime should account for the not-for-profit, member-owned structure of credit unions, avoid placing undue burdens on smaller institutions, and ensure credit unions have access to the same innovative tools as banks or fintechs without being disadvantaged. DCUC has previously called for tailored rules and access parity in the digital-asset space
- Clarity and harmonization of oversight. While assigning new authority to the CFTC is a step forward, coordination with other regulators remains essential. The draft’s emphasis on CFTC–SEC cooperation is appropriate, but Congress and the agencies must ensure that credit unions are not caught in overlapping or contradictory regulatory regimes
- Protection of member-owners, especially in the military community. Many credit unions serve highly mobile, financially-vulnerable populations (including deployed servicemembers and families). Any regulatory framework should embed robust consumer protections, disclosures, fraud prevention, and safeguards against abuse or systemic risk. DCUC has stressed the connection between financial readiness and mission readiness for these communities
- Avoiding unintended consequences for community-based institutions. As policymakers consider how to scale oversight for digital-asset platforms, they must guard against imposing one-size-fits-all compliance regimes that could choke innovation at smaller credit unions or raise costs for members in the name of regulatory burden. Tiering, exemptions, or proportional compliance models should be part of the conversation
- Ensuring innovation, competition and inclusion. The digital-asset ecosystem offers opportunities to modernize payments, reduce friction in commerce, and expand access to financial services. Credit unions stand ready to participate in responsible innovation — so long as the regulatory framework allows them to compete and serve their membership mission effectively. Our message remains: innovation + inclusion must go hand in hand
"In short, DCUC applauds the Senate’s leadership in moving toward a workable federal regulatory regime for digital commodities," concluded Stverak. "We look forward to engaging with Congress, the CFTC, the SEC and other stakeholders to ensure that the final policy advances innovation, protects consumers and supports the mission of credit unions, especially those serving military and veteran communities."