WASHINGTON – U.S. Senate Committee on Agriculture, Nutrition, and Forestry Chairman John Boozman (R-AR) welcomed Commodity Futures Trading Commission Chairman nominee Michael Selig and urged his colleagues to advance digital commodity market structure legislation during a hearing Wednesday.
The following is Chairman Boozman’s statement as prepared for delivery:
“Good afternoon. It is my privilege to call this hearing to order. I thank my colleagues for joining us. Today we will consider the nomination of Mr. Michael Selig to be Chairman and Commissioner of the Commodity Futures Trading Commission.
“Mr. Selig, congratulations on your nomination. Thank you for your willingness to serve.
“As this committee knows well, the CFTC is unique in that it is the only federal financial regulator that oversees the agriculture and energy risk management markets, the resiliency of which are critical to our commodity supply chains.
“Well-regulated, liquid and resilient derivatives markets help our producers manage risks ranging from interest rate uncertainty, commodity pricing volatility and natural disasters. In times when uncontrollable risks can wipe away years of hard labor, futures markets are an essential risk management tool in the toolbox.
“The CFTC has historically taken a pragmatic, principles-based approach to regulation, and has engaged in constructive dialogue with regulated entities and market participants. This approach, combined with diligent policing of the cash and derivatives commodity markets, has resulted in trust in the CFTC and the deepest and most liquid derivatives markets in the world.
“The CFTC’s regulatory regime is time-tested and has helped the derivatives markets serve as the gold standard in terms of withstanding external shocks, and the CFTC staff have developed deep expertise of the derivatives markets.
“The CFTC has seen the markets it regulates evolve over time. Emerging markets such as crypto derivatives and event contracts have grown in size, and Congress – including this Committee – is actively working on granting the CFTC authority to regulate the spot digital commodity markets.
“Turning attention to the nuances that come with emerging markets while ensuring focus on agriculture risk management markets is essential, and it is my expectation that CFTC leadership will strike this balance.
“I want to repeat what I have said multiple times before this committee: the CFTC is the right agency to regulate spot digital commodity trading. The CFTC – and only the CFTC – should regulate the trading of digital commodities. This is because only the CFTC understands the unique characteristics of commodities and commodity- based contracts.
“While the CFTC has the right regulatory approach, expertise, and skill set to handle this new responsibility, it is up to Congress to grant the agency this new authority to regulate spot digital commodity trading.
“Failure by Congress to do so will leave U.S. consumers vulnerable to bad actors and will keep the U.S. behind the rest of the world. Though a regulatory framework for spot digital commodities has yet to be authorized by Congress, the markets and underlying technology are fast at work. Absent a comprehensive U.S. regulatory framework, bad actors will continue to go unchecked, and legitimate entities will be disincentivized from participating in U.S. markets. All the while, U.S. consumer participation will continue to grow, as will the risk faced by consumers.
“This committee has an opportunity to advance its portion of a regulatory framework that protects U.S. customers, allows U.S. businesses to grow, and recognizes the importance of innovative blockchain technology and fundamental principles like the right to self-custody.
“I want to thank Senator Booker for his partnership on our bipartisan discussion draft, and I look forward to working with him and the rest of this committee to advance a bipartisan proposal out of this committee. The time to act is now, and I look forward to working with each of you towards advancing this goal.
“As this committee moves forward with its bipartisan proposal to grant CFTC authority, I am eager to work with Mr. Selig and the CFTC on ensuring we get this right.
“I look forward to hearing from Mr. Selig on these issues. Again, congratulations on your nomination.
“I now turn to Ranking Member Klobuchar for her opening statement.”