At a United States Congressional hearing on Wednesday, 25 July, Christopher Giancarlo, Chairman of the Commodity Futures Trading Commission (CTFC), elaborated on the need for CFTC participation in blockchain innovation in the US.
“Because we’re falling behind”
At the “Examining the Upcoming Agenda for the CFTC” public hearing, Giancarlo explained the frustrations of the CFTC not being able to participate in Proof-of-Concept (PoC) or beta tests of new blockchain innovations, that of which can be boiled down to bureaucracy.
He says that the CFTC would love to take part and create a regulatory node in the blockchain to observe these developments. However, Giancarlo noted that the CFTC was unable to do so, owing to present laws which stifle efforts to appropriately regulate the blockchain with full understanding.
The issue is that the CFTC can’t freely exchange information between itself and a private startup as it is considered a “gift”, which is something that the agency is strictly prohibited from doing, or even a bank, even if it was by invitation.
Giancarlo also points out that paying a private company for information is redundant as it will need to go through a time-consuming appropriations process, by which time he says “this thing is already launched”.
His words come in response to Representative Austin Scott’s question of how the CFTC Modernization Act would allow them to do their job better, a bill that was also proposed by the representative.
He noted that the Bank of England had recently managed to finalize a Distributed Ledger Technology (DLT) project through their four-year-long Project Innovate that allowed them to participate in blockchain beta tests, from which they created a new “bank-to-bank payment system” and that it is going to be “blockchain compliant”.
Giancarlo was also asked earlier by the representative to explain the future intentions of the CFTC’s hub for “engagement with the fintech innovation community” called LabCFTC. To which he responded, “LabCFTC is our front door into these new regulatory fintech developments in the marketplace, and it’s so important to us to be able to understand these innovations that are coming down the pike so fast.”
The commissioner of the CFTC Rostin Benham called cryptocurrency a “modern miracle” in early June, also believing that blockchain was a remedy to globally-recognized problems such as poverty, corruption, food and healthcare.
In July, the Chamber of Commerce created a Fintech Innovation Initiative that is urging the government to establish clearer regulations on cryptocurrencies and related activities. Furthermore, it sent a report to US financial regulators also relaying the message that the US could fall behind the rest of the world.
It appears as though the cogs are finally turning in the US, though the nation will have to certainly set a high pace should it wish to be in league with countries such as South Korea, Malta, or the United Kingdom.
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