Commodity trading chairman addresses crypto regulation, concerns for ag market

The head of a national regulatory group told a gathering of South Dakotans that his agency could take on cryptocurrency regulation in the future.

Rostin Behnam, chairman of the Commodity Futures Trading Commission (CFTC), spoke at a joint meeting between 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 spoke about the new legislation that could give the CFTC authority to regulate digital goods such as 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, such as Bitcoin and Ethereum, to make transactions more transparent and provide federal oversight to the market, as well as protect against fraud and abusive trading 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 that there has been some backlash against the CFTC potentially regulating cryptocurrency markets, but Behnam believes the agency is capable of monitoring this trade.

“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 changes, technology develops, and we are ready for it. It will be exciting to see what happens.”

Behnam’s agency works primarily with derivatives markets.

Derivatives markets deal with financial contracts whose value comes from the value of the assets being bought or sold, such as currencies, stocks, bonds, commodities, etc. A commodity is a commodity or an agricultural product, such as coffee, corn or coal.

The CFTC oversees these types of markets, promotes competitive markets, and protects investors from fraud, manipulation, and abusive trading practices.

Behnam also discussed the rising prices in commodity markets due to inflation.

“Natural gas, fuel prices are obviously pretty high, and we’re seeing a decline in those commodity prices over the last couple of months, but still pretty high, and again, correlated with a number of things,” he said.

He attributed the high prices to impacts from COVID-19, supply shortages across the state and the Russian invasion of Ukraine.

Behnam said the CFTC is working to ensure local farmers benefit from the derivatives markets.

“I think collectively as a group, and certainly me as chairman, we’re very focused on the ag markets, on the energy markets, making sure the markets work well for you,” he said.

Behnam was nominated to chair the CFTC by President Joe Biden and assumed the position on January 21, 2021.