WASHINGTON–House Agriculture Subcommittee on Commodity Markets, Digital Assets, and Rural Development Ranking Member Dr. Yadira Caraveo delivered the following statement at today's Joint Hearing entitled "The Future of Digital Assets: Measuring the Regulatory Gaps in the Digital Asset Markets." The Joint Hearing was convened before the Subcommittee on Commodity Markets, Digital Assets, and Rural Development of the Committee on Agriculture and the Subcommittee on Digital Assets, Financial Technology, and Inclusion of the Committee on Financial Services.
[As prepared for delivery]
Thank you. I first want to thank Chairman Johnson, Chairman Hill, and Ranking Member Lynch for helping bring the Agriculture and Financial Service Committees together for a joint hearing this morning.
During a recent Agriculture subcommittee hearing on April 27th, we discussed the spot market regulatory gap, avenues to strengthen customer protections, and the need for sufficient resources and funding mechanisms to support these efforts at the Commodity Futures Trading Commission.
Any legislation that passes Congress must of course address these issues, but the sprawling nature of the digital asset industry also highlights the importance of cross-jurisdictional cooperation and communication.That is why I am happy to be here today, with my colleagues from the Financial Services Committee.
The Biden Administration has supported this collaborative approach too, through issuance of an Executive Order titled “Ensuring Responsible Development of Digital Assets,” which called on federal agencies to work jointly and issue reports on a variety of subjects, including a report issued last October reviewing the specific financial stability risks and regulatory gaps. I hope the success of that joint effort will be echoed in today’s hearing.
The scale of digital asset activities has increased significantly in recent years, both in terms of market participation and use-cases. And while our federal financial regulators have successfully utilized their existing enforcement and regulatory authorities, we still see charges of rampant and willful non-compliance from some of the biggest market participants.
Ultimately, providing regulatory clarity to the digital asset industry must also support a robust enforcement regime and prioritize market participants.
Finally, there have been concerns raised as to whether CFTC has the resources needed to regulate the digital asset spot market. I would like to note that this is not the first expansion of the Commission’s authorities in recent years. Post Dodd-Frank the Commission successfully wrote and implemented rules that expanded their authorities to the swaps market. Further, as the digital asset industry has grown, we have seen the agency dutifully exercise their enforcement authorities.
Yet, if we value increased action in the spot market, we must value those who do the work for the taxpayers. I strongly believe any digital asset legislation passed by Congress must include a funding mechanism for the CFTC.
With that, I would like to thank our witnesses for joining us at today’s hearing and I look forward to the conversation.
I yield back.
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