Bill Overview
Title: Digital Commodities Consumer Protection Act of 2022
Description: This bill grants exclusive jurisdiction to the Commodity Futures Trading Commission over activity involving digital commodities as specified by the bill. The bill defines digital commodities as fungible digital forms of personal property that can be transferred person-to-person without an intermediary. Excluded from this definition are securities, interests in physical commodities, and U.S.-backed digital currencies. The commission does not have jurisdiction over digital commodities used solely for the purchase or sale of a good or service. Digital commodity platforms (including brokers, custodians, dealers, and trading facilities) must register with the commission and comply with risk management and good governance procedures. The bill also sets forth recordkeeping requirements, conflict of interest standards, and other consumer protections.
Sponsors: Rep. Feenstra, Randy [R-IA-4]
Target Audience
Population: People using digital commodities worldwide
Estimated Size: 50000000
- Digital commodities are widely used across the globe, so many individuals are likely to be impacted.
- Given that it is a U.S. bill, the primary direct effect will be on U.S. consumers, brokers, and trading platforms engaged in digital commodities.
- Digital platforms need to adhere to new regulations, affecting all users on such platforms.
Reasoning
- As digital commodities become more popular, the regulatory oversight is vital to ensure consumer protection.
- The policy primarily affects brokers, custodians, and investors in digital commodities within the U.S., as it demands stricter compliance and record-keeping.
- While some consumers may experience higher trust due to enhanced security, others may face hurdles due to increased compliance costs for platforms, which could be passed down to users.
- A sizable population is into digital commodities in the U.S., and thus our simulations need to capture a range of potential impacts, from those who might see improved market confidence to those who might perceive regulatory burdens.
Simulated Interviews
Software Engineer (San Francisco, CA)
Age: 30 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- I think more regulation can be good for stability in these volatile markets.
- My main concern is if my fees will increase due to these new compliance costs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 4 |
Financial Analyst (New York, NY)
Age: 45 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- This new policy seems like a step towards safer markets.
- I'm worried about how agile the market will remain.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 4 |
| Year 20 | 7 | 3 |
Freelance Graphic Designer (Austin, TX)
Age: 28 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- I'm not sure how these new rules will affect everyday transactions.
- If it does add costs, that could be an issue.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 3 |
Retired (Miami, FL)
Age: 60 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 7.0 years
Commonness: 4/20
Statement of Opinion:
- This seems like it could safeguard my investments.
- I just hope this doesn't lead to unnecessary complications.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 9 | 5 |
| Year 10 | 8 | 4 |
| Year 20 | 7 | 3 |
Entrepreneur (Seattle, WA)
Age: 38 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- The compliance requirements could increase costs.
- We may need to revisit our pricing strategy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 5 | 4 |
| Year 10 | 5 | 3 |
| Year 20 | 4 | 2 |
Student (Chicago, IL)
Age: 24 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 8/20
Statement of Opinion:
- I hope this makes things safer for small-time users like me.
- Cost increases would make it harder for me to use crypto.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 3 |
Small Business Owner (Phoenix, AZ)
Age: 50 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- It's crucial that we adapt to these changes for reputational benefits.
- Fulfilling compliance may be challenging and costly for smaller enterprises.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 3 |
| Year 5 | 6 | 2 |
| Year 10 | 5 | 1 |
| Year 20 | 4 | 1 |
Casino Manager (Las Vegas, NV)
Age: 34 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 6.0 years
Commonness: 3/20
Statement of Opinion:
- Digital assets are key in our business, so compliance is non-negotiable.
- However, changes might affect our operations and technology budgets.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 4 |
| Year 10 | 7 | 3 |
| Year 20 | 6 | 2 |
IT Specialist (Denver, CO)
Age: 41 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 4.0 years
Commonness: 9/20
Statement of Opinion:
- I'm optimistic as it may drive more structured innovation.
- But if innovation is stifled by regulation, we'd miss out.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 4 |
Digital Marketing Specialist (Boston, MA)
Age: 29 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 8/20
Statement of Opinion:
- I'm mostly worried about privacy.
- There could be positives in terms of safety.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 4 |
| Year 20 | 5 | 3 |
Cost Estimates
Year 1: $50000000 (Low: $30000000, High: $80000000)
Year 2: $60000000 (Low: $35000000, High: $90000000)
Year 3: $55000000 (Low: $32000000, High: $85000000)
Year 5: $57000000 (Low: $34000000, High: $87000000)
Year 10: $60000000 (Low: $35000000, High: $90000000)
Year 100: $70000000 (Low: $38000000, High: $95000000)
Key Considerations
- The evolving nature of digital commodities may lead to unforeseen regulatory challenges.
- Coordination with other governmental and international regulatory bodies is crucial to avoid overlaps and conflicts.
- Broader adoption and integration of digital commodities in traditional financial systems could compound impacts.