The head of a national regulatory group told a gathering of South Dakotans that his agency could take on cryptocurrency regulations in the future.
Rostin Behnam, chairman of the Commodity Futures Trading Commission (CFTC), spoke at a joint meeting of the South Dakota Corn Utilization Council and the South Dakota Corn Growers Association. The meeting was Tuesday morning at the Raven Precision Agricultural Center at South Dakota State University.
Behnam talked about the new legislation that could give the CFTC authority over regulating digital commodities like cryptocurrencies. The Digital Commodities Consumer Protection Act of 2022 was introduced last week by U.S. Senators John Thune, R-South Dakota, Debbie Stabenow, D-Michigan, John Boozman, R-Arkansas, and Cory Booker, D-New Jersey.
The legislation aims to give the CFTC some authority over cryptocurrency, like Bitcoin and Ethereum, to make transactions more transparent and provide federal oversight to the market, as well as protect against fraud and abusive trade practices.
“I would say it’s an important thing, it’s a necessary thing, but it’s also a change for the agency,” Behnam said.
He added there has been some pushback against the CFTC potentially regulating cryptocurrency markets, but Behnam believes the agency is capable of overseeing that trading.
“We need to focus on what we do and what expertise we have, and that’s commodity markets, and let’s just use the tools we have and make some changes,” he said. “Life’s changing, technology evolves, and we’re ready for it. It’ll be interesting to see what happens.”
Behnam's agency primarily works with derivatives markets.
Derivatives markets deal with financial contracts whose value comes from the value of the assets being bought or sold, like currencies, stocks, bonds, commodities, etc. A commodity is a raw material or agricultural product, like coffee, corn or coal.
The CFTC oversees these kinds of markets, promotes competitive markets and protects investors from fraud, manipulation and abusive trade practices.
Behnam also discussed the rising prices in commodity markets because of inflation.
“Natural gas, fuel prices are obviously pretty elevated, and we’re seeing a decrease in those commodity prices over the past couple months, but still pretty elevated, and again, correlated to a number of things,” he said.
He attributed the elevated prices to impacts from COVID-19, supply shortages across the state and the Russian invasion of Ukraine.
Behnam said the CFTC is working to make sure local farmers are benefiting from derivatives markets.
“I think collectively as a group, and certainly me as chairman, we very much focus on the ag markets, on the energy markets, making sure the markets are working well for you,” he said.
Behnam was nominated as chairman of the CFTC by President Joe Biden and assumed the position on Jan. 21, 2021.
