The Chairman of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, has reiterated the agency’s position that stablecoins should be classified as commodities and placed under jurisdiction.
At a meeting of the Senate Agriculture Committee, on Wednesday, March 8, the head of the CFTC reiterated its stance when answering questions raised by New York State Senator Kirsten Gillibrand about the contrasting reports by the US regulator and its federal counterpart, the Security and Exchange Commission (SEC) stablecoin Tether .
“Even if there is a regulatory framework around stablecoins, they will become commodities in my view.” Benham said, “It is clear to our enforcement team and the commission that Tether, the stablecoin, is a commodity.”
This recent statement from the CFTC chairman is in sharp opposition to SEC chairman Gary Gensler, who claimed in a New York Magazine interview on February 23 that every other digital asset except Bitcoin is a security.
CFTC In Regulatory Battle With SEC Over Stablecoins
In recent times, the Commodity Futures Trading Commission and the Securities and Exchange Commission have struggled to control the fast-moving US crypto market that lacks a comprehensive federal regulatory framework.
Stablecoins, in particular, are one of the most important areas, with two US agencies trying to claim regulatory authority over the issuance and trading of these fiat-backed digital assets.
While the CFTC may be the first federal agency to take enforcement action on a stablecoin following a $41 million fine on Tether in 2021, the SEC has dominated the news lately as the primary regulator of stablecoin operations in the US.
In February, the Securities and Exchange Commission issued a Wells Notice to stablecoin operator Paxos, stating its ongoing consideration of suing the tokenization company based on the Binance USD stablecoin as an unregistered security.
At the same time, the SEC also filed a lawsuit against Terraform Labs and its CEO, Do Kwon, for orchestrating a multi-billion securities fraud involving the algorithmic stablecoin TerraUSD Classic (USTC).
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There is a need for an agreement
The current tussle between the SEC and the CFTC over stablecoins does not bode well for the US crypto market as it leaves other federal banking authorities unsure about how to handle these digital assets.
Thus, there is a need for consensus between the two agencies, with dialogue or the implementation of a comprehensive legal framework.
That said, stablecoins remain an important component of the crypto market, as they allow investors to avoid the high volatility associated with most crypto assets.
At the time of writing, the total stablecoin market is worth $135.5 billion, representing about 13.5% of the total cryptocurrency market.
Total Crypto Market Cap valued at $958.433B | Source: TOTAL Chart on Tradingview.com
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