Gary McWilliams

HOUSTON (Reuters). Congressional representatives and cryptocurrency experts are working together to give the Commodity Futures Trading Commission responsibility for regulating digital currencies. Summer Mersinger is a CFTC commissioner.

The CFTC would be able to expand its mandate to monitor financial markets, agricultural and energy, as well as pave the path for regulation of other digital assets like non-fungible coins, or NFTs.

The CFTC also examines how carbon trading markets work, in order to determine if they can be used for risk management and hedging.

Mersinger was one of five members of an independent board which oversees financial and commodity futures markets. He spoke on Tuesday at the Reuters Commodities Trading USA conference.

Major crypto companies have backed CFTC. U.S. senators Cynthia Lummis of Wyoming and Kirsten Gilibrand of New York filed a bill Tuesday that would designate CFTC as the main industry overseer.

Mersinger said, “You see the industry come together around the CFTC being the primary regulator.”

Although lawmakers have yet to decide which agency will oversee cryptocurrencies, the Lummis Gillibrand proposal bill is a good starting point.

Mersinger explained that the CFTC began its own examination of a role for cryptocurrency. The staff are now looking into areas such spot-market crypto trading, where they could play an expanded role. The agency has never regulated spot market trading and the reviews it is conducting are only preliminary.

She said, “We are still a strong regulator, but our registrants can have a lot more flexibility.” She said that they were very keen to adopt this approach over the more top-down style of other financial regulators.

The CFTC also has an interest in carbon trading. The regulation of carbon trading is now largely regulated by the industry and participants are free to opt out.

Mersinger explained that although there are a lot of people interested in the area, they don’t have any regulatory authority. She also suggested that one consideration would be what adjustments might be required for voluntary markets to function properly.

When U.S. crude oil prices plunged to the negative in 2020 due to fears about a shortage of storage and collapsing demands, the CFTC gave an advisory.

She said that one lesson was learned by the agency was that they needed to work together more closely and discuss contract settlement terms with traders and exchanges.

She said that storage was not as important as people feared. However, it wasn’t well communicated.