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. Maloney, Sean Patrick [D-NY-18]
Target Audience
Population: People involved in trading or using digital commodities
Estimated Size: 4000000
- The Bill affects digital commodities, which are digital forms of property traded peer-to-peer.
- Platforms like brokers, custodians, dealers, and trading facilities handling these digital commodities are directly impacted as they need to register and comply with new regulations.
- Investors and consumers who trade or deal with digital commodities will be impacted as they receive new consumer protections.
- Excludes digital commodities used solely for goods or services, securities, interests in physical commodities, and U.S.-backed digital currencies, so these areas are unaffected.
- The Bill's jurisdiction is limited and specific to areas dealing with digital commodities in the manner defined in the legislation.
Reasoning
- The target population for the policy includes people involved in trading or using digital commodities. This involves both active traders and passive investors, as well as the platforms that facilitate these transactions.
- The policy primarily targets digital commodity platforms, which includes brokers, custodians, dealers, and trading facilities. This adds a regulatory requirement but also potentially improves market stability.
- Individuals who are not using digital commodities, or only use them for straightforward purchases of goods and services are not directly affected by this bill.
- The policy impact on personal wellbeing will vary, with those directly involved in the platforms seeing potential business costs and regulatory hurdles, while consumers may see additional protections that could enhance trust and confidence.
Simulated Interviews
Digital Commodity Trader (San Francisco, CA)
Age: 34 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- The policy will increase operational costs due to compliance requirements, which may reduce profit margins.
- Having clear regulations could make the market more stable, potentially attracting more investors.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Tech Marketing Specialist (New York, NY)
Age: 28 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- I think having more consumer protections is good. It makes me feel safer trading.
- The additional costs to platforms might get passed down to us.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Financial Analyst (Austin, TX)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 6/20
Statement of Opinion:
- This policy brings clarity which is good for long-term investing.
- I'm concerned about how quickly platforms will adapt to these changes. Could slow down business initially.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 7 |
Retired Engineer (Seattle, WA)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 8/20
Statement of Opinion:
- I generally prefer less regulation, but increased consumer confidence might boost the market.
- I'm unlikely to be affected directly unless these changes impact the market significantly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Crypto Exchange Platform Manager (Chicago, IL)
Age: 39 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- The new regulations mean hiring more compliance officers, so our operating costs will rise.
- This could also mean more security and trust in the market, which helps long-term growth.
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 | 7 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Software Developer (Los Angeles, CA)
Age: 31 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 9/20
Statement of Opinion:
- Our usage of digital commodities isn't affected since it's only for acquiring services.
- I'm pleased there are regulations for trading, but not impacting our operations directly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Student (Miami, FL)
Age: 22 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 1.5 years
Commonness: 10/20
Statement of Opinion:
- It makes the market safer, but as a casual trader, I don't see immediate impacts.
- Maybe fees will increase, but it's not big enough to matter for my small trades.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Accountant (Denver, CO)
Age: 58 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 7/20
Statement of Opinion:
- Having a clear set of rules is reassuring for managing clients' digital portfolios.
- This might increase administrative tasks, fit cleanly into our compliance routines though.
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 | 7 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Supply Chain Manager (Portland, OR)
Age: 48 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- My use case isn't directly impacted, we use commodities for exchanging goods.
- I hope the overall improvements bring about better trust in digital transactions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Policy Analyst (Boston, MA)
Age: 40 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- This regulation is an important step for market integrity and consumer protection.
- While compliance costs are a concern, the long-term benefits are anticipated to outweigh them.
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 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Cost Estimates
Year 1: $50000000 (Low: $40000000, High: $60000000)
Year 2: $51000000 (Low: $41000000, High: $61000000)
Year 3: $52020000 (Low: $41680000, High: $62360000)
Year 5: $53060400 (Low: $42453600, High: $63667200)
Year 10: $55450704 (Low: $44316280, High: $67277028)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The cost of regulation must be balanced with potential economic benefits from a more stable digital commodities market.
- The policy may lead to increased innovation in digital commodities through clearer regulatory guidance.
- Consumer protections may enhance the credibility and safety of digital commodities, potentially attracting more market participants.