CFTC May Gain Primary Authority Over Digital Commodities Under Senate Draft Bill
On November 10, 2025, Senator John Boozman and Senator Cory Booker released a bipartisan Senate Agriculture Committee discussion draft bill that proposes a new authority for the Commodity Futures Trading Commission (“CFTC”) for the exclusive oversight over “digital commodities” traded in spot markets. The draft bill also introduces new categories of registration for “digital commodity broker,” “digital commodity custodian,” “digital commodity dealer,” and digital commodity trading facility”.
The measure is a partial counterpart to the Digital Asset Market Clarity Act (“CLARITY Act”) passed by the House earlier this year, and shows the continued congressional efforts to develop a comprehensive legislative framework for the cryptocurrency market.
The Boozman-Booker draft defines “digital commodity” as “any fungible asset that can be exclusively possessed and transferred, person to person, without necessary reliance on an intermediary, and is recorded on a cryptographically secured public distributed ledger.” The draft bill’s definition of digital commodity emphasizing the disintermediated nature of a digital asset differs from the CLARITY Act’s definition of digital commodity, which focuses on whether a digital assets is “intrinsically linked” to a blockchain. Both the CLARITY Act and the draft bill exclude from the definition of digital commodity securities, permitted payment stablecoins, pooled investment vehicles, banking deposits, and commodity derivatives.
As with the CLARITY Act, the draft bill grants the CFTC exclusive jurisdiction over secondary market cash or spot transactions in digital commodities executed on or subject to the rules of registered entities. The CFTC would also have jurisdiction over a cash or spot transactions in a permitted payment stablecoins offered by registered entities, but such jurisdiction would regulate only the trading venues. The CFTC would not have any authority over stablecoin issuers or the operation of the stablecoin.
Trading facilities that offer a cash or spot market trading venue in digital commodities would be required to register with the CFTC as a “digital commodity exchange”. As with the CFTC’s current regulatory framework regarding designated contract markets, digital commodity exchanges would be subject to statutory core principles and could only list for trading those digital commodities that are “not readily susceptible to manipulation”.
The draft bill would also require intermediaries that facilitate retail spot digital commodity transactions to register with the CFTC as “digital commodity brokers” or “digital commodity dealers.” Brokers are firms that, as a regular business, take or route non‑institutional customer orders in spot digital commodities while controlling customer funds or execution (including for trading on registered digital commodity exchanges). Dealers are firms that regularly trade spot digital commodities as principal with non‑institutional customers off‑exchange. Limited exemptions apply for de minimis activity and single‑state firms, and the CFTC is directed to further refine the scope, including for certain banks and eligible contract participants.
Digital commodity brokers and dealers would be subject to CFTC‑set capital, reporting, recordkeeping, and audit‑trail requirements, and could transact only in digital commodities that are “not readily susceptible to manipulation.” They would be required to maintain risk‑management and conflicts of interest controls, avoid anticompetitive practices, segregate and hold customer digital assets with “qualified digital commodity custodians,” and are expressly prohibited from misusing customer assets, including using them for blockchain validation or governance without written customer consent. Business conduct rules require risk disclosures, fair communications and marketing, and compliance with explicit anti‑fraud and anti‑manipulation standards.
What’s Next
The Senate draft will undergo debate and amendments, and will eventually need reconciliation with the House’s CLARITY Act and separate digital assets legislation under consideration by the Senate Banking Committee. The jurisdictional grant to the CFTC over spot markets, the development of various registration categories for digital commodity market participants, and the emphasis on customer protection obligations reflects the continued emphasis by Congress to develop a comprehensive federal regulatory structure for digital commodity spot markets.
