Senate Committee Highlights Need for Federal Crypto Oversight
- PHPzOriginal
- 2024-07-17 16:07:57328browse
On Wednesday the Senate Committee on Agriculture, Nutrition, and Forestry held a hearing on “Oversight of Digital Commodities.”
The Senate Committee on Agriculture, Nutrition, and Forestry held a hearing on Wednesday to discuss the need for federal oversight of digital commodities, such as bitcoin and ethereum, in the wake of significant investor losses, widespread hacking incidents, and the collapse of major crypto firms in 2022.
Senate Committee Highlights Need for Federal Crypto Oversight
The Senate Committee on Agriculture, Nutrition, and Forestry held a hearing on “Oversight of Digital Commodities” on Wednesday.
During the hearing, the committee discussed the need for robust regulation in the crypto market to protect investors and maintain market integrity. The discussion also highlighted the absence of federal oversight for digital commodities like bitcoin and ethereum, which constitute the majority of the value traded in crypto markets.
The hearing focused on the heavy institutional investment in bitcoin and ether derivatives and exchange-traded products, which is increasing the interconnection between crypto and traditional financial markets. However, any federal regulator does not oversee the trading of digital commodities.
Senator Debbie Stabenow (D-MI), the chairwoman of the Senate Committee on Agriculture, Nutrition, and Forestry, has proposed bipartisan legislation to give the Commodity Futures Trading Commission (CFTC) regulatory authority over digital commodities.
According to Stabenow, three key pillars will serve as the foundation for future legislation. The first pillar calls for the application of comparable rules to comparable risks. This entails mandating that crypto firms safeguard customer assets, maintain sufficient capital reserves, and adhere to rigorous cybersecurity standards, much like traditional financial institutions.
The second pillar emphasizes protecting retail customers by providing accurate investment information and ensuring fair market practices free from conflicts of interest. The third pillar emphasizes securing adequate, permanent funding for the CFTC to oversee the evolving digital commodities market and uphold its broader regulatory responsibilities.
“Our colleagues in the House have recognized that protecting customers and providing clear rules of the road is not a partisan issue and have passed crypto market structure legislation out of their Chamber,” she noted, adding:
“I am confident we can come together to pass legislation that brings greater integrity to the crypto market.”
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