The Global Markets Advisory Committee of the US Commodity Futures Trading Commission (CFTC) is in favor of creating a taxonomy to classify cryptocurrencies and digital assets.
The CFTC, which regulates options and futures markets in the United States, is seeking to play a larger role in regulating cryptocurrencies and digital assets. The regulatory agency considers cryptocurrencies to be commodities and should fall under its regulatory jurisdiction. However, the classification of cryptocurrencies as commodities or securities in financial markets has been disputed between the CFTC and the SEC, the commission in charge of regulating stock exchanges and securities in the country, for some time.
This lack of clarity in the classification of cryptocurrencies has posed several challenges for companies in the sector and has affected the growth of the crypto industry in the country. To offer a solution, the CFTC's Global Markets Advisory Committee has proposed create a taxonomy that comprehensively classifies cryptocurrencies and that allows these digital assets to have greater regulatory clarity.
According to the committee, which voted on Wednesday to create this comprehensive taxonomy, properly classifying crypto assets will allow lawmakers to appropriately draft future laws and regulations, as well as adjust existing ones based on the needs of the emerging crypto industry.
A standard for cryptocurrency terminology
During the committee meeting, BNY Mellon's global head of digital assets, Caroline Butler, stressed the importance of classifying cryptocurrencies with clear and comprehensive terminologyButler quoted a friend as saying that “words speak volumes,” and that he hopes that creating a taxonomy for crypto assets will help develop appropriate regulations for the industry.
Using specific terminology for cryptocurrencies and digital assets will allow, among other things, improve communication among the participants in the sector, foster education and adoption between new investors and technological development and bring greater clarity to the crypto sector, optimizing transparency and compliance.
The vote by the CFTC's Global Markets Advisory Committee regarding the taxonomy and definition of cryptocurrency classification is currently being considered by the regulatory agency. Several organizations related to the crypto world, such as the Stellar Development Foundation are part of this committee, together with Uniswap Labs and the Chamber of Digital Commerce.
Focus on stablecoin regulation
On the other hand, US regulators have been focusing on regulating stablecoins, mainly due to their importance in payments and the country's financial system.
The objective, as explained, in addition to developing effective policies and regulations that increase transparency and provide greater regulatory clarity, is create a strong, secure and well-informed ecosystem that facilitates development and innovation.
Several lawmakers have criticized the actions of US federal agencies, such as the SEC, for maintaining a strict approach towards cryptocurrencies and for the lack of legal clarity, which has been undermining the potential of cryptocurrencies and blockchain networks.
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