WASHINGTON – U.S. Senate Committee on Agriculture, Nutrition, and Forestry Chairman John Boozman (R-AR) delivered the following opening remarks at a hearing titled “Stakeholder Perspectives on Federal Oversight of Digital Commodities.”
The following is the Chairman’s opening 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 are here to talk about digital commodities and hear from a range of stakeholders on what this Committee needs to do with respect to legislation.
“It has been reported that the current market cap for the digital asset markets exceeds $3.5 trillion, approximately 70 percent of digital assets traded are digital commodities, and roughly 55 million Americans own or use crypto.
“The U.S. currently lacks comprehensive federal regulation of the digital commodity markets, which means a significant percentage of Americans trade crypto with very limited federal customer and market risk protections. This has been referred to as the digital commodity “regulatory gap.”
“While the regulatory gap hasn’t stifled consumer interest in crypto, we know from past experiences what can happen when crypto intermediaries operate outside of a regulated framework. Without clear and comprehensive digital commodity market regulation, Americans’ economic interests are at risk.
“The lack of comprehensive federal regulation in the U.S. has created significant regulatory uncertainty among innovators, developers, and market participants. Not knowing the rules of the road, U.S. businesses have moved overseas, leaving U.S. consumers vulnerable.
“This is why we must act on digital assets legislation to protect customers and ensure innovation and growth remain in the U.S.
“I have said it before but will say it again: The CFTC – and only the CFTC – should regulate the spot trading of digital commodities. The CFTC currently has enforcement authority over these markets. We should build upon that authority – not distribute it among different regulators. Let me be clear, entities that list or facilitate the trading of digital commodities should not be exempted from CFTC regulation simply because they are registered with another federal agency.
“The U.S. financial capital markets’ standing as the deepest and most liquid in the world is largely a byproduct of the federal government’s bifurcated approach to regulating those markets – with the SEC regulating the securities markets and the CFTC regulating the commodity derivatives markets.
“This longstanding American approach to financial market regulation was at the core of the Dodd-Frank Act’s regulation of the swaps and security-based swaps markets and should be the foundation upon which we build a comprehensive regulatory framework for digital asset markets.
“This is not to pit regulators against one another; it is the opposite. We draw inspiration from the agencies’ past regulation of the swaps markets as we entrust the CFTC and SEC with the authority to collaboratively regulate the digital asset markets.
“We must act expeditiously to develop a comprehensive regulatory framework for the trading of digital commodities, but we must ensure we get this right. We must also support our colleagues in the Banking Committee, as they work on a regulatory framework for the trading of digital assets in securities transactions.
“As with the CFTC and the SEC, while there are clear lines of jurisdiction between our committees, we are committed to working collaboratively on a comprehensive bill for the digital asset marketplace.
“I, alongside Ranking Member Klobuchar and all members of this committee, will work in a transparent and bipartisan manner to develop this regulatory framework.
“This task requires hearing from everyone who wants to be heard, and for all committee members to work together to create a framework that allows for liquid and resilient spot digital commodity markets, strong retail protections, and rules that give American businesses confidence to continue to innovate and grow in the United States.
“Today we will hear from former CFTC Chairmen, the head of the derivatives self-regulatory organization, and the head of an association representing a diverse group of crypto stakeholders. I look forward to hearing their thoughts as we contemplate legislation.”