Behnam, Chairman of the Commodity Futures Trading Commission, emphasized the necessity of passing laws pertaining to the authority of regulators in the cryptocurrency sector during his yearly presentation before the House Agriculture Committee on March 6.
Takeaway Points:
- CFTC Chair urges Congress to close the regulatory vacuum in cryptocurrencies.
- Rostin Behnam expressed confidence that his organization could create a regulatory framework in a year if Congress passes the FIT Act.
- The law seeks to regulate digital assets, define the CFTC’s and SEC’s jurisdiction, deal with stablecoin issuance, tax digital assets, and safeguard consumers.
The Need To Fill The Gap
Highlighting the recent surge in Bitcoin (BTC), Behnam underlined the necessity to “fill the gap in crypto regulation.” According to Behnam, anticipating “another period of irrational exuberance” is an understatement.
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“We need to act; Congress needs to act to fill this gap, specifically around Bitcoin, which is a commodity. Here are two of the largest tokens, making up approximately 60 to 70% of the whole market capitalization [of crypto],”
Rostin Behnam, CFTC Chair, referring to BTC and ether
Behnam mentioned during his speech that the Financial Innovation and Technology for the 21st Century Act (FIT Act) states that the Commodity Futures Trading Commission (CFTC) can establish a regulatory framework for cryptocurrency regulation in less than a year if the FIT bill is passed by Congress.
Behnam said the classification of bitcoin as a commodity “is mostly used in the counter-negative.”
“If it’s not a security, then it’s a commodity,” he said, adding, “in which case, the analysis has to take place to make a determination that it’s not a security, which is frequently how we test whether it’s an investment contract, and answer that question in the affirmative, that it’s not a security, that it becomes a commodity.”
The Law Objectives
The law aims to regulate digital assets, define the CFTC’s and SEC’s jurisdiction, deal with stablecoin issuance, tax digital assets, and safeguard consumers.
