WASHINGTON – U.S. Senator Debbie Stabenow (D-Mich.), Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition, and Forestry, today released the following opening statement at a hearing review the Digital Commodities Consumer Protection Act. Live video of the hearing is available here.
Stabenow’s statement, as prepared for delivery, follows:
We’re here today because a rapidly increasing number of Americans are investing in cryptocurrencies; yet there is no federal oversight over the tokens that make up the majority of this market. And just as quickly as these assets have risen in popularity, we have seen their value drop.
As a result, hardworking Americans have lost billions of dollars. Dollars they use to support their families, keep roofs over their heads, or nestle away for hard-earned retirement. In the past few months alone, numerous companies have gone bankrupt, and the value of some widely traded coins has dwindled to cents on the dollar.
Meanwhile, $1.9 billion worth of cryptocurrency was stolen in hacks in the first seven months of this year alone—up 60 percent from this time last year. At the same time, it is important to recognize that cryptocurrencies and blockchain technology offer an alternative to using large financial institutions.
One-third of Americans who have bought or traded crypto earn less than $60,000 a year, some of whom lack trust in these institutions or find them too costly. They simply cannot afford to lose their savings because of a lack of guardrails in these markets.
We need to have clear, consistent rules of the road that allow good actors to innovate and grow, while first and foremost keeping customers safe.
As the Committee with oversight over one of our nation’s two market regulators, it is our job to ensure that we bring the necessary protections to this marketplace. Together with my partner Senator Boozman, and our colleagues Senator Booker and Senator Thune, we have introduced the Digital Commodities Consumer Protection Act.
This bill gives the Commodity Futures Trading Commission oversight over digital assets that act like commodities—such as Bitcoin and Ether—that currently have no federal oversight. This is a glaring hole in our financial system, and I believe we must close it.
Our bipartisan bill will require that all digital commodity platforms register with the CFTC. This will set a uniform national standard and allow the CFTC to catch fraud before it happens. As its name suggests, our bill is focused on consumer protection.
It will require that platforms segregate and safeguard customer assets, hold sufficient capital, and abide by rigorous cybersecurity standards. It will eliminate many of the conflicts of interest in this market.
And it will mandate that platforms speak truthfully about the risks of trading digital commodities and don’t engage in misleading advertising. The CFTC is the right regulator for the job. Congress gave the agency oversight of the swaps market in Dodd-Frank, and it responded by setting the global standard. Our nation’s derivatives markets have been a mainstay for our producers during recent supply chain disruptions and elevated commodity prices.
We’ll hear from Chairman Behnam shortly about how the CFTC has been a leader in policing the crypto markets for fraud and abuse. And this week we received a letter from former Republican CFTC Chairman Christopher Giancarlo expressing his support for this bipartisan bill. This bill also gives the agency the additional resources to get this job done right.
Finally, it recognizes that other financial agencies have critical roles to play in regulating digital assets. I was pleased to see Chair Gensler’s recent comments about how the CFTC and SEC can work together to make this market safer. And we’ve had productive discussions with SEC staff about this bill. As President Biden has recognized, this is a big responsibility with a lot at stake, and it’s going to take all of us at the table, working together.
At our table today will be some of the brightest leaders in this space, and I look forward to hearing from each of you on how we can continue to bring transparency and accountability to this marketplace, while still enabling the innovation that makes this technology so promising.