Amy Klobuchar Says CFTC Is 'Well Positioned' To Fully Regulate Crypto And Other Digital Assets

Forbes Breaking News

During a Senate Agriculture Committee hearing prior tot he congressional recess, Sen. Amy Klobuchar (D-MN) spoke about granting the Commodity Futures Trading Commission full authority to regulate crypto.

Transcript

00:00Well, thank you so much, Chairman, and thank you to all our witnesses for being here today.

00:06Over the past decade and a half, as the chairman just noted,

00:10we have seen the increasing use of and investment in digital commodities like Bitcoin.

00:16What was once a niche market for early adopters and cryptography enthusiasts

00:23is now a swiftly growing market that is increasingly interconnected

00:28with traditional financial markets and institutions.

00:31When we met in July of last year, I noted that the market capitalization of digital assets

00:37was over $2 trillion. It is now more than $3 trillion.

00:40The price of Bitcoin then was $73,000. It is now more than $100,000.

00:46And yet, oversight and regulation of this market has not evolved to keep up with the growth.

00:52The Commodity Futures Trading Commission has long played a vital role

00:56in ensuring the integrity of our financial and agricultural derivative markets.

01:03That includes protecting market participants from fraud and manipulation,

01:08maintaining orderly markets, and enabling farmers, ranchers, manufacturers,

01:12and small businesses to hedge against risk.

01:16And we're honored to have two former chairs here with us today.

01:19As early as 2015, the CFTC determined that digital assets could be commodities

01:27and found that Bitcoin, the largest such asset, was a commodity.

01:32Derivatives on Bitcoin and other digital commodities have been listed on CFTC-regulated exchanges,

01:38and the CFTC has full regulatory authority over these products.

01:43But it is only anti-fraud and anti-manipulation authority over the underlying spot markets,

01:49a regulatory gap that has resulted in untold losses to customers

01:55and the increasing risk of contagion to traditional financial markets

01:59as digital commodity markets grow in size and are integrated into the existing financial system.

02:06If Congress gives the CFTC the authority and the resources to step in and oversee these spot markets,

02:15it would be well-positioned to do so given its existing role.

02:21And that role is overseeing the digital commodity derivative markets

02:25and the enforcement authority it has exercised over the underlying spot markets.

02:30Providing regulatory certainty and oversight to these markets

02:34can encourage responsible innovation and the adoption of new technologies.

02:39At the same time, we have to ensure a level regulatory playing field

02:44so that crypto market participants are subject to standards

02:48as rigorous as those applied to traditional financial institutions.

02:53If Congress is to do this, it must do so without compromising on crucial customer protections,

03:00with safeguards to prevent illicit finance,

03:03and with provisions to address market integrity concerns.

03:07It also means putting in place guardrails to address conflicts of interest in the digital assets sector,

03:14preventing exchanges and issuers from using their position

03:17to favor affiliated actors or exploit customers.

03:21And if Congress is going to establish a new financial regulatory framework,

03:26it must strengthen our system, not weaken it,

03:30by putting safeguards in place to prevent corruption or self-dealing by federal officials,

03:36including those in positions of power who might sponsor, issue, or profit from digital tokens.

03:42I look forward to hearing from our witnesses on how they believe regulation of digital commodities

03:48market can responsibly encourage innovation while ensuring our financial markets

03:55continue to be the safest in the world for market participants.

03:59This is a big job we have, but I look forward to hearing your testimony and working with you.

Category

Transcript

Be the first to comment

Recommended