“The CFTC is well situated to play an increasingly central role in overseeing the cash digital asset commodity market,” commission chair Rostin Behnam said in testimony Wednesday before the U.S. Senate Committee on Agriculture, Nutrition, and Forestry.
Behnam asked for an increase of at least $100 million to the CFTC’s annual budget of $300 million to take on additional responsibilities in regulating the volatile crypto market.
The Senate and House Agriculture committees are the financial agency's committees of jurisdiction because of its role in overseeing farm commodities, though its role has broadened over time well past that remit.
“We have also been a forceful and disciplined cop on the beat," Behnam said. "The continued emergence of digital asset technology presents risks and opportunities, and the CFTC stands ready to leverage its expertise and experience to confront both."
In his testimony, the CFTC chair outlined the ways in which his regulatory agency is uniquely positioned to oversee the digital asset market, repeatedly referring to it as the “cash digital asset commodity market”, stressing that digital assets should be viewed as commodities.
His stance that digital assets are commodities was a nod to an ongoing power struggle between the CFTC and the Securities and Exchange Commission on who gets to regulate crypto, which turns on the question of whether digital assets are commodities or securities. Some crypto companies have pushed for the CFTC to play a bigger role, while Coinbase has called for a brand-new regulator specific to digital assets.
Last month, Agriculture Committee chairwoman Debbie Stabenow and other committee members sent a letter to Behnam in which they wrote that “the two largest digital assets by market capitalization, bitcoin and ether, are commodities,” suggesting that the committee is inclined to give the CFTC more regulatory power.
SEC chair Gary Gensler still maintains that many crypto assets are securities and go under the SEC’s purview, with the exception of bitcoin, which the CFTC has been regulating.
A potential expansion of the CFTC’s role in regulating crypto could erode the SEC's position. But it's also possible the two agencies could emerge with joint oversight responsibilities, as is the case with securities futures.