Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam said Wednesday that regulations oversight under the CFTC could have significant benefits for the crypto sector, including a potential boost to Bitcoin price.
“Growth might occur if we have a well-regulated space. Bitcoin might double in price if there’s a CFTC-regulated market,” Behnam told attendees during a fireside chat at NYU School of Law.
Behnam said a clear regulatory framework could pave the way for institutional investors to enter the market.
“These incumbent institutions in the crypto space see a massive opportunity for institutional inflows that will only occur if there’s a regulatory structure around these markets. Non-bank [crypto] institutions thrive on regulation, they thrive on regulatory certainty, and they thrive on a level playing field. And they may say otherwise,” Behnam further elaborated.
Behnam stated that he supports the bipartisan bill introduced by the leaders of the Senate Agriculture Committee, which would grant the CFTC the primary regulator for the crypto industry.
The executive also supported a bill provision allowing the cash-strapped agency to levy fees on regulated institutions. Behnam considers such fundraising efforts as crucial if CFTC is to tackle the challenge of regulating the crypto industry. The executive pointed out that the agency’s small operating budget has impacted its ability to deal effectively with crypto crimes.
A bipartisan bill recently sponsored by the Senate Agriculture Committee supports the need to give the CFTC “exclusive jurisdiction” over crypto trades that meet commodities law, but not anything that may be a security.
The crypto industry has been pushing for either a federal agency or Congress to create a clear definition of “digital commodity” or digital security, which could give companies greater clarity on when and how they must register with the CFTC or the SEC (the U.S. Securities and Exchange Commission).
The bill seeks to bestow crypto oversight to the CFTC, which the crypto industry sees as friendlier than the SEC. By giving primary responsibility for crypto oversight to the CFTC, the bill sidelines the SEC, whose chairman, Gary Gensler, has taken aggressive actions toward cryptocurrency interests.
Gensler considers most digital assets in the roughly $1.2 trillion market to qualify as securities, similar to stock in publicly traded companies, giving his agency the responsibility to oversight them and their issuers. But the bipartisan bill rejects such a claim and considers most digital assets much more similar to commodities than securities.
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