Key takeaways
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CFTC chair Rostin Behnam believes that stablecoins and Ether are going to be commodities.
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The CFTC has always maintained that Bitcoin, Ether, and other cryptocurrencies are commodities.
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Behnam has called for a proper regulatory framework to cover the cryptocurrency market.
Stablecoins and Ether will be regarded as commodities
Rostin Behnam, the chairman of the Commodity Futures Trading Commission, told the United States senate that Ether and stablecoins should be regarded as commodities.
He made this statement during a Senate Agricultural hearing on Wednesday, March 8th. When asked by Senator Kirsten Gillibrand about the differing views held by the CFTC and the Securities and Exchange Commission (SEC) following the CFTC’s 2021 settlement with stablecoin issuer Tether, Behnam said the agency considers stablecoins to be commodities. He said;
“Notwithstanding a regulatory framework around stablecoins, they’re going to be commodities in my view. It was clear to our enforcement team and the commission that Tether, a stablecoin, was a commodity.”
The CFTC had maintained that some digital assets, including Bitcoin and Ether, are commodities.
When asked what evidence the agency would use to win regulatory influence over Ether during the Senate hearing, the CFTC chair said it wouldn’t allow Ether futures products to be listed on CFTC exchanges if it didn’t believe that it was a commodity asset. He added that;
“We have litigation risk, we have agency credibility risk if we do something like that without serious legal defenses to support our argument that [the] asset is a commodity.”
A regulatory framework for crypto is still needed in the United States
Regulating cryptocurrency companies in the United States have been left to the SEC and CFTC. However, there is no clear regulatory framework for cryptocurrency companies to operate in the United States.
The SEC has been very active in regulating cryptocurrency companies for what it believes are violations of securities laws.
Last month, the SEC charged Nishad Singh, a former lead engineer at cryptocurrency exchange FTX for defrauding investors of the now-collapsed crypto trading platform.
The regulatory agency is also investigating Robinhood over its cryptocurrency activities.