Earlier this year, I released a Primer with respect to cryptocurrencies and other digital assets.  My intent in releasing the Primer was to provide clarity as to the CFTC’s legal authorities when it comes to these assets in light of the recent growth in their popularity and the prevalence of confusion and misunderstanding regarding our regulatory function in this space as directed by Congress.

Since issuing this Primer, I have encouraged all regulators to provide clearer descriptions of their existing authorities to participants and the public.  Only from that point can we determine whether gaps exist, and properly evaluate the need for any new laws and regulations.  Otherwise, we risk stifling innovation due to poorly understood objectives and uncoordinated responses. 

I therefore applaud the recent joint statement issued by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency on crypto-asset policies.  I am pleased that these federal banking regulators have joined me in an effort to provide greater clarity around the impact of existing laws and regulations on certain crypto-asset activity.  Clearly outlining the application of various existing requirements is foundational to advancing proper oversight of these products and their various utilities. 

As digital assets play a larger role in our financial system and the economy on a whole, those who invest or engage in activities relating to such assets, as well as the general public, are entitled to clarity as to how this new financial asset class is regulated in the United States.  Until we remedy the current confusion about the application of federal and state regulators’ existing legal authorities with respect to digital assets, we cannot have an honest conversation about whether any agency needs new authorities.

Before considering any overhaul of our regulatory structure as it relates to digital assets (and to avoid regulating these assets through the exercise of enforcement authority), let’s get the facts straight about our current system.