By Pete Schroeder

WASHINGTON (Reuters] – On Tuesday, a bipartisan group of U.S. senators introduced a bill that would set new regulations for cryptocurrency and transfer the bulk of their oversight the Commodity Futures Trading Commission.

Representative Cynthia Lummis of Republican, one the Congress’ most prominent cryptocurrency advocates, is introducing this bill along with Democratic Senator Kirsten Gillibrand. This legislation represents one of Congress’ most ambitious attempts to put clear guardrails around controversial and rapidly growing cryptocurrency markets.

It would direct that the CFTC and the Securities and Exchange Commission play primary roles in regulating cryptocurrency products. Senators stated most crypto products operate more like commodities and securities. The smaller CFTC has been viewed as a better regulator of cryptocurrency because it is more familiar with securities laws.

The bill will not be passed by Congress in this session, since the midterm elections are only months away. But, the framework may serve as a basis for further debates on how to best oversee these markets.

Jaret S. Seiberg, Cowen Washington Research Group analyst wrote: “We anticipate that this bill will serve as the starting point of debate next year, regardless of which party controls both the House and the Senate.” “What matters is that there’s a bipartisan effort by both parties to incorporate crypto in the existing regulatory framework, even though the details may change,” he said.

According to senators, the bill is intended to give certainty and transparency to crypto markets while protecting consumers.

In addition to other things, the bill will establish new rules to govern “stablecoins,” tokens designed to be linked to traditional assets like the U.S. Dollar. These products are under severe pressure after the recent crash in TerraUSD, a prominent stablecoin.

This bill will require stablecoin producers to have high-quality liquid assets that equal the current value of all stablecoins. Public disclosures about those holdings would also be required.