The US Commodity Futures Trading Commission’s chairman, Cristopher Giancarlo, has recently made some waves following blockchain-related comments made at a Congressional public hearing this week.
The hearing was dubbed ”Examining the Upcoming Agenda for the CFTC”, and was presided over by the House Agricultural Committee. Perhaps somewhat surprisingly, Giancarlo indicated the agency’s interest in blockchain-related ventures.
Specifically, he summarized the need for the agency to be able to examine and explore blockchain technology and possible use cases. In fact, Giancarlo revealed that a consortium of six banks had already contacted the CFTC with the intent of constructing a prototype blockchain system.
This system was intended to be used for trading credit default swaps, as well as making bank payments. According to Giancarlo, the consortium invited the CFTC to design a CFTC-controlled regulatory node for the system – however, stiff regulations ended up preventing the CFTC from partaking.
The CFTC Act prohibited this partnership, as the free exchange of information between the consortium and CFTC would technically be considered a gift – something which the CFTC is forbidden from engaging in.
Moreover, Giancarlo stated that it would be nearly impossible to pay the consortium or a private company to jointly explore blockchain-related ventures, due to the time-consuming appropriation process needed to allocate funding to this.
According to Giancarlo, this factor is one of several which are causing the CFTC to fall behind modern equivalents in other countries.
Notably, Giancarlo mentioned the Bank of England, and how they have announced a new blockchain-compatible payment settlement system – something Toshi Times has previously covered.
”We’re 4 years behind”, Giancarlo stated, when comparing the CFTC to its equivalents. He also highlighted the need for the agenda to understand, test, and know how to use blockchain as a regulator before bringing any suggestion to Congress.
Furthermore, Giancarlo suggested that using subpoenas to get information from blockchain-related ventures is ”the wrong way to go about it”. Instead, he argued that cooperation should be the way forward.
Giancarlo also went on to state that it is not the CFTC’s role to oversee the cryptocurrency market. Although Congress could potentially expand its jurisdiction in order to do so, Giancarlo stated that the most important question, in that case, would be timing.
Until then, Giancarlo suggested that the cryptocurrency industry should be treated with the same regulation template used for the internet when this was in its infancy – ”first, do no harm”.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.