Generally, when someone talks about cryptocurrency regulations – many critics quickly jump to the conclusion that a foreign government imposing regulations on what was supposed to be a “decentralized” currency is bound to tank this cryptocurrency value.
However, that is not what Rostin Behnam, Chairman of the Commodity Futures Trading Commission (CFTC) believes.
On Wednesday, Behnam discussed how CFTC-led regulation might have substantial benefits for the crypto business, including a potential increase in bitcoin’s price.
“Growth might occur if we have a well-regulated space,” Behnam said during a fireside chat at NYU School of Law. “Bitcoin might double in price if there’s a CFTC-regulated market.”
Behnam has constantly pushed for the importance of providing regulatory certainty to market players, something many in the crypto business believe is lacking.
For many years, the CFTC alongside the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) have clashed over the role of the top regulator for the crypto industry, with both reluctant to issue much formal guidance for crypto companies, preferring to set a regulatory precedent through enforcement actions.
The CFTC Chairperson also argued how a “clear regulatory framework” could be a green light for investors to enter the market.
“These incumbent institutions in the crypto space see a massive opportunity for institutional inflows that will only occur if there’s a regulatory structure around these markets,” Behnam said.
The Chairman believes that “non-bank institutions”, like cryptocurrencies usually benefit from regulation. “they thrive on regulatory certainty, they thrive on a level playing field,” Behnam said.
CFTC To Oversee Crypto in The Future?
The Senate Agriculture Committee, which oversees the CFTC, introduced a bipartisan bill that would make the CFTC the primary regulator for the crypto industry, expanding the agency’s authority to oversee crypto spot markets and requiring crypto trading firms to register with the CFTC – though it stopped short of explicitly defining where one agency’s purview ended and the other began.
On Thursday, Behnam stated his support for the measure, which contains a clause that would allow the cash-strapped agency to collect fees on regulated firms – something Behnam suggested would be necessary if the CFTC is to confront the problem of regulating cryptocurrency.
“We are currently appropriating money by Congress, and it has put us in a position where we feel like we’re constantly on edge about how much money we will be appropriated,” Benam said.