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Speaking before the U.S. Senate Committee on Agriculture, Nutrition, & Forestry on Wednesday, CFTC Chair Rostin Behnam expressed his view that both stablecoins and Ethereum should be considered commodities and regulated by his agency. Chair Behnam also echoed the rising worries of many that legislation covering digital assets is still severely lacking in the US, especially in light of the rising influence of the sector.
On Wednesday, Rostin Behnam, the Chair of the Commodity Futures Trading Commission spoke before the U.S. Senate Committee on Agriculture, Nutrition, & Forestry on the rising prevalence of digital assets in commodities markets. He pointed out the need to improve the regulatory framework end expressed his concern over the increasing gap between regulation and legislation.
Behnam also commented that he believes that stablecoins and Ethereum should be considered commodities and thus regulated by his agency. The stance is in direct opposition to that of the SEC’s Gary Gensler who has claimed, on multiple occasions, that it is very likely that all digital assets except for Bitcoin fall under the definition of securities.
While some have come to see the CFTC as the more friendly regulator, the Behnam’s Commission has been far from idle when it comes to digital assets. In late October, it revealed that about 20% of its 2022 enforcement actions targeted cryptocurrency-related entities. Furthermore, Benham also sought more authority over digital assets when he spoke before the Senate in September.
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Both the rise in popularity of cryptocurrencies and their decline through the “crypto winter” highlighted the need for a clear regulatory framework pertaining to the industry. While some progress has been made, many still firmly believe that the United States is lagging behind when it comes to relevant legislation.
One of the chief concerns expressed by digital asset companies and certain lawmakers is that the way American regulators are currently operating is serving to stifle innovation in the country while doing little to protect consumers. A recent SEC action against Kraken, a major cryptocurrency exchange, prompted one of the agency’s Commissioners to criticize the approach calling it “lazy and paternalistic”.
Furthermore, the recent enforcement actions gave rise to the proposed “Keep Innovation in America Act” which is currently being pushed by a bipartisan group of lawmakers and seeks to curb regulatory overreach. On the other hand, while the Biden administration expressed its disappointment over Congress’ tardiness when it comes to setting a clear legal framework, it also commended regulators’ aggressive approach.
Editorial note (March 9th, 2023, 8:00 AM EST): A formatting error was fixed.
Do you think Ethereum should be regulated by the CFTC, the SEC, or neither? Let us know in the comments below.