Commodity Futures Trading Commission (CFTC) chairman Christopher Giancarlo has recently spoken on CNBC’s “Fast Money” segment, touching the topic of cryptocurrency regulation. Many believe the lack of clear regulatory framework is the biggest obstacle, stopping big institutional investors from entering the virtual currency market. The chair of CFTC was skeptical about the regulation being introduced in the immediate future, saying there are several major hurdles, hindering the process of regulators.
Firstly, the complicated nature of bitcoin itself makes it hard to regulate, as there are similarities between bitcoin and gold but other aspects are similar to currencies and securities. Notably, two major American crypto exchanges are now successfully operating bitcoin futures contracts.
According to Mr. Giancarlo, “Bitcoin and a lot of its other virtual currency counterparts really have elements of all of the different asset classes, whether it‘s medium of payment, whether it’s a long-term asset. and so as regulators we’ve come to grips with this just now in real time and it’s complicated. And I don’t see it being resolved any time soon.“
Another major problem is that regulatory bodies operate under rules that were established in the first half of the 1900s, while bitcoin is less than a decade old. Inevitably, embracing an innovative technology, such distributed ledger and cryptocurrencies will take time, especially having in mind the outdated rules, which are not appropriate for modern markets.
The chairman noted that “The statutes we are operating were written in 1935. And it’s often hard to look at those statutes and find out where something as new and innovative as Bitcoin and many other cryptocurrencies, where do they fall into a regulatory regime which was written decades ago. We see elements of commodities that are subject to our regulation, but depending on which regulatory regime you are looking at, it has different aspects of all of that.
When asked about the capabilities of the current Congress to bring some clarity in crypto regulation, Mr. Giancarlo struck a positive note, saying that, “There’s certainly an appetite among a number of Congressmen and Senators that I’ve spoken to, to approach this with some new eyes, some new thinking and so I think there’s a growing chorus on Capitol Hill for some re-thinking here.“
Mr. Giancarlo is set to step down from his position, following the expiration of his term in 2019. He has been one of the most favorable regulators for the crypto sphere, welcoming the technology with an open-minded approach, which is a stark contrast to most other institutional officers. The Obama appointee has even received a nickname “Cryptodad”, which he embraced in his numerous Twitter posts.
During his tenure, the CFTC oversaw the development of the said Bitcoin futures products and successfully took the battle to crypto-related frauds, suing a record amount of them in a single fiscal year.
Meanwhile, Bitcoin price has seen significant losses in the past 48 hours, hovering around the $9000 threshold at press time, having opened at $9426 yesterday.
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I have been following the crypto markets since mid 2017, just in time to witness the incredible surge of the digital asset industry. Fascinated by the potential of blockchain technology I’ve started to dig deeper and that’s how I ended up meeting the Toshi Times team. I hold a Political Science degree, therefore the crypto regulation development is particularly interesting for me. I’m also heavily involved with music, running my own label, a YouTube channel and working with distribution. People call blockchain the ‘Fourth Industrial Revolution’ and I believe it will change our daily lives in the coming years and we will have the front row seats to witness it.