CFTC Head: Most Stablecoins are Commodities

The head of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, has said that most stablecoins are commodities and should be policed as such unless Congress directs regulators otherwise. Behnam cited a specific enforcement action the CFTC took against stablecoin issuer Tether and its sibling exchange BitFinex in 2021 to support his view.

Based on the cases that we’ve brought around stablecoins, I think that there’s a strong legal argument that USDC and other similar stablecoins would be commodities.

Rostin Behnam, Commodity Futures Trading Commission (CFTC)

The CFTC and SEC have expressed differing viewing about the status of stablecoins. The SEC has stated that Paxos’s dollar-pegged stablecoin, BUSD, could be classified as an unregistered security.

Behnam said that he wouldn’t consider fiat-backed stablecoins securities due to the fact that the holder has “no expectation of profit”. He qualified his statement by adding that he didn’t know how algorithmic stablecoins should be classified.

See Also

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Behnam called on Congress to pass clear regulations for cryptocurrency, stating “there’s a gap in regulation and we need to comprehensively regulate it because enforcement alone is not going to solve the problem, the risks, the customer protection issues around crypto”.