Ethereum and Stablecoins Designated as Commodities by CFTC: What’s Next?
The United States Commodities and Futures Trading Commission (CFTC) has claimed jurisdictional power over Ethereum and stablecoins, stating that they are commodities. In doing so, the CFTC has set the stage for a potential conflict with the Securities and Exchange Commission (SEC), which treats all cryptocurrencies except Bitcoin as securities.
Chair Rostin Behnam made the announcement on March 8, during a hearing with the Senate Agriculture Committee. He asserted that the CFTC has the authority to oversee derivatives and the underlying market for Ethereum and stablecoins, given their status as commodities.
Behnam emphasized that the CFTC has listed Ethereum on its exchanges for some time and would not have allowed the Ether futures product to be listed on a CFTC exchange if it wasn’t a commodity asset.
Stablecoins, such as USDC, are not securities according to Behnam, as they do not operate with the expectation of profit and return to the holder. He stated that there’s a strong legal argument for stablecoins, like USDC, to be commodities, as per the cases that the CFTC has brought around stablecoins.
CFTC vs. SEC
While the CFTC considers Ethereum and stablecoins to be commodities, the SEC views all cryptocurrencies as securities, except for Bitcoin. Senator Kirsten Gillibrand questioned Behnam about the differing views held by the CFTC and SEC, to which Behnam responded that despite the regulatory framework around stablecoins, they are commodities.
Uncertainty in the regulatory landscape
The CFTC’s move adds to the confusion surrounding the regulatory framework for digital assets. It remains to be seen how the SEC will respond to the CFTC’s assertion of jurisdictional power over Ethereum and stablecoins. The classification of cryptocurrencies is a contentious issue, and the lack of regulatory consensus poses a challenge for companies operating in the crypto space.
The Future of Cryptocurrency Regulation
The CFTC’s assertion of jurisdictional power over Ethereum and stablecoins raises questions about the future of cryptocurrency regulation in the US. The lack of a unified approach to the classification of cryptocurrencies makes it challenging for companies to navigate the complex regulatory landscape.
However, the CFTC’s move could bring greater clarity to the classification of cryptocurrencies, benefiting the industry in the long run.