The Senate Agriculture Committee on Wednesday exercised its jurisdiction over the Commodity Futures Trading Commission by holding a hearing on the emerging use of digital money and whether the CFTC has the skills and resources to play an appropriate regulatory role over digital assets.

Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., said in an opening statement, “Americans are buying and selling digital assets using online exchanges, many of which are unregulated or not held to the same standards as traditional financial institutions. This poses unacceptable risks to consumers and could lead to instability in our financial markets. Fraudsters have already stolen billions of dollars in assets, leaving customers with no recourse. And some platforms fail to prohibit abusive activities like insider trading.”

She added, “We cannot overlook the outsized climate impacts of Bitcoin and other digital assets. Astonishing amounts of energy are currently being used to ‘mine’ certain digital assets. When those sources of energy are fossil fuels, digital assets threaten our progress in fighting the climate crisis. The carbon footprint of this technology must be addressed.

“Digital assets may have been designed to democratize the transfer of money, but that does not mean they should operate outside of the rules. History has shown us, time and again, that this is a mistake.

“The good news? Regulation and innovation are not mutually exclusive,” Stabenow added. “If they were, our financial markets would not be the strongest in the world. But we can’t afford to wait until the next crisis. Congress must work with regulators and the Biden administration to design a framework that protects consumers and our environment and keeps our markets fair, transparent, and competitive.”

Sen. John Boozman, R-Ark., ranking member on the committee, noted that he and Stabenow and the leaders of the House Agriculture Committee had sent a letter to CFTC Chairman Rostin Behnam, asking him about the scope and size of digital asset markets and whether the CFTC is working with other federal financial regulators to both support and police this growing financial ecosystem.

“Yes, it’s true – bicameral, bipartisan collaboration can still exist, and we are demonstrating that at the agriculture committees, despite what else may be going on in Washington,” Boozman said. “And this must be the way we address issues relating to these markets going forward, because they are complicated and they touch so many of us, whether we appreciate it or not.”

Behnam responded to the letter and testified before the committee.

In his testimony, Behnam said the CFTC has since 2014 been “aggressive in using its limited fraud and manipulation authority in the digital asset space.”

But he added that “many challenges remain, and the digital sector now demands more and more of the CFTC’s attention and time, which I believe necessitates additional resources to adequately address these issues. We are past the stage where digital assets and decentralized financial technologies are a research project, sandboxing what may come in the future. The issues are at the front and center of our thinking at the commission, in addition to our traditional regulatory, oversight, and enforcement responsibilities.”