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: Sen. Stabenow, Debbie [D-MI]
Target Audience
Population: Individuals involved in or affected by the digital commodities market
Estimated Size: 30000000
- The Digital Commodities Consumer Protection Act of 2022 focuses on digital commodities, which are digital forms of personal property that can be transferred without intermediaries.
- The legislation will primarily impact individuals who trade or hold digital commodities, excluding securities, physical commodity interests, and U.S.-backed digital currencies.
- Platforms facilitating trading of digital commodities (brokers, custodians, dealers, trading facilities) will need to register with the CFTC and comply with additional regulatory requirements like risk management.
- Globally, there is a robust and growing digital commodities market, where many people are involved in trading or investing in digital assets.
Reasoning
- The target population consists of individuals involved in the trading of digital commodities, which are not classified as securities or U.S.-backed currencies. The policy affects platforms and their consumers, with a focus on consumer protection and platform registration.
- The budget constraints imply limited initial regulatory enforcement and educational outreach, affecting primarily large platforms and perhaps overlooking smaller or emerging markets within the digital asset ecosystem.
- While a large portion of the U.S. population is indirectly involved with digital commodities, significant impacts will be felt by active traders and investors, estimated to be around 30 million citizens involved with relevant platforms.
Simulated Interviews
Software Engineer (San Francisco, CA)
Age: 32 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 15/20
Statement of Opinion:
- I believe this policy will add necessary regulation to an otherwise volatile market.
- It should make trading more secure, though I am concerned about potential limitations on decentralized finance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 5 |
Financial Advisor (Austin, TX)
Age: 45 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- This regulation could stabilize the market, offering better advice to my clients.
- Increased oversight could lead to a more trustworthy system.
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 | 9 | 4 |
| Year 20 | 8 | 3 |
Freelance Artist (Brooklyn, NY)
Age: 28 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 12/20
Statement of Opinion:
- I’m worried about how this will affect my ability to trade NFTs and get paid in crypto easily.
- Regulations might complicate transactions for artists relying on digital commodities.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 4 | 3 |
Small Business Owner (Miami, FL)
Age: 52 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 18/20
Statement of Opinion:
- I barely understand this market, so more regulation would help me feel safer using digital currencies in my business.
- The policy might also increase transaction costs with compliance requirements.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 4 |
| Year 10 | 6 | 3 |
| Year 20 | 5 | 2 |
Graduate Student (Seattle, WA)
Age: 24 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- As someone studying blockchain, I see regulation as a double-edged sword; it provides safety but might hinder innovation.
- The policy could steer where funding and new projects will go in the field.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 6 |
| Year 20 | 8 | 5 |
Accountant (Chicago, IL)
Age: 40 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- Clearer regulations help me advise clients better, but they also could add administrative burden.
- Ultimately, this is a much-needed step towards legitimacy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 4 |
| Year 20 | 7 | 3 |
Retired Teacher (Baltimore, MD)
Age: 60 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 2.0 years
Commonness: 3/20
Statement of Opinion:
- I work with a mix of excitement and apprehension, hoping this regulation offers more safety for my investments.
- However, I’m concerned it will complicate how I manage my modest trading activities.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 6 | 4 |
| Year 5 | 5 | 4 |
| Year 10 | 4 | 3 |
| Year 20 | 3 | 2 |
IT Consultant (Denver, CO)
Age: 35 | Gender: other
Wellbeing Before Policy: 9
Duration of Impact: 4.0 years
Commonness: 8/20
Statement of Opinion:
- My clients are worried about new compliance costs, but this policy helps clarify the boundaries for legal operations.
- Such changes might increase the demand for consultancy, which is good for business.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 9 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 7 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 5 |
Journalist (New York, NY)
Age: 30 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 11/20
Statement of Opinion:
- Regulation brings a slew of topics to explore and report on in my field, which is good for my career.
- It will create challenges to balance views from different stakeholders affected by the policy changes.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 9 | 7 |
| Year 3 | 9 | 6 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 4 |
| Year 20 | 7 | 3 |
Digital Platform Developer (Atlanta, GA)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 6.0 years
Commonness: 7/20
Statement of Opinion:
- I have been expecting more regulations; it could increase the demand for secure trading platforms.
- However, development costs might rise due to additional compliance requirements.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 4 |
| Year 20 | 6 | 3 |
Cost Estimates
Year 1: $50000000 (Low: $40000000, High: $70000000)
Year 2: $55000000 (Low: $45000000, High: $75000000)
Year 3: $60000000 (Low: $50000000, High: $80000000)
Year 5: $70000000 (Low: $60000000, High: $90000000)
Year 10: $100000000 (Low: $80000000, High: $120000000)
Year 100: $500000000 (Low: $300000000, High: $700000000)
Key Considerations
- Need for additional CFTC resources for effective implementation and enforcement.
- The evolving nature of digital commodities and market practices may necessitate frequent regulatory updates.
- Potential resistance or operational challenges from platforms adjusting to new regulatory standards.