The United States Commodities Futures Trading Commission (CFTC) has released a new primer on digital currencies, restating its view that virtual currencies are commodities.
One of the longest and most enduring debates around the use of digital currencies such as Bitcoin centers around whether such currencies should be considered securities or commodities – and now a new primer released by the US Commodities Futures Trading Commission (CFTC) has restated its stance on the matter.
The primer, which is now available online, restates not only the definition of a commodity but further evaluates the basics of virtual currencies along with the potential regulation of risks surrounding them.
The document details commodities broadly, explaining physical commodities, natural resources, and currency as well as interest rate. Daniel Gorfine, the CFTC’s Chief Innovation Officer, offered that “As people worldwide try to understand and wrap their heads around the virtual currency ecosystem, we thought it timely and important for our first primer to help explain the space, identify how developments involve the CFTC, and highlight risks that investors or users of virtual currencies should carefully consider.”
The CFTC first opined in 2015 that Bitcoin was a commodity and would hence be subject to its jurisdiction. The primer reiterates that view, where Gorfine quipped that “There is no inconsistency between the SEC’s analysis and the CFTC’s determination that virtual currencies are commodities and that virtual tokens may be commodities or derivatives contracts depending on the particular facts and circumstances.”
Following the release of the primer, the cryptocurrency market suffered a brief lapse – wherein Bitcoin dipped by some $500 USD and altcoins such as Ethereum returned to the $300 USD mark. At the time of writing, the market has bounced back – Bitcoin has returned to $5608 USD, while Ethereum has climbed to $308 USD.
The shift is reminiscent of the larger correction cryptocurrencies suffered earlier this year when China first banned ICOs, and later moved to suspend Bitcoin exchanges operating within the country.
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