Merging is “a step in the right direction” to address crypto’s energy use – Rostin Behnam

Rostin Behnam, head of the United States Commodity Futures Trading Commission, or CFTC, said the Ethereum blockchain’s move to proof-of-stake could help reduce the crypto’s energy use, but implied legislation would likely still be needed to address the issue.

Speaking at a Thursday hearing before the Senate Agriculture Committee, Behnam fielded a question from Minnesota Senator Amy Klobuchar, who addressed the environmental impact of the “significant energy” required by cryptocurrency mining. Without mentioning the merger by name, the CFTC chairman said the crypto bill now being considered by lawmakers would require a report on energy use that could lead to future policy discussion and “incentives to move away from carbon-intensive energy sources.”

“We’ve all heard the statistics about the incredible amount of energy used to mine coins,” Behnam said. “I would say that there was an event last night with Ethereum that is going to reduce energy consumption – a step in the right direction, but definitely not solving the problem.”

In his written testimony, Behnam said he was in favor of passing the Digital Commodities Consumer Protection Act, legislation aimed at expanding the CFTC’s authority over the crypto market, adding that the regulatory body had the “expertise and experience” to be the “commodity market regulator for digital assets.” According to the CFTC head, many of the criticisms surrounding the crypto space – focusing on scams and fraud – can be addressed by giving the agency “a lens into the trading platform” rather than relying on users to bring enforcement cases.

“[The bill] would give the CFTC authority to regulate markets. This volatility, the fraud, the manipulation – a lot of that would probably go away because now we have a regulator, a policeman on the beat, and this would deter activity from bad actors.”

Related: Cryptocurrency needs clarification on “digital commodity” – Sheila Warren

The Ethereum merger took place on Thursday, marking the blockchain’s transition from proof-of-work to proof-of-stake and effectively cutting the network’s energy consumption by an estimated 99.95%. The price of Ether (ETH) fell below $1,500 in the hours following the event, and Cointelegraph reported many crypto-branded non-fungible tokens with a Merge theme.