Crypto and Blockchain are Transforming the Markets: CFTC Chairman

The Commodity Futures Trading Commission (CFTC) is addressing the “rapidly changing markets and technological developments” with its fintech innovation hub LabCFTC, revealed J. Christopher Giancarlo, chairman of the agency.

In his speech on March 14 at the 44th Annual International Futures Industry Conference, Giancarlo made bullish remarks on Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term and Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term mentioning them as the phenomenon for market transformation.

According to the chairman, the agency needs to adopt an exponential growth mindset which will help it to become a “quantitative regulator” in this dynamic market. He also remarked that the CFTC needs to embrace “market-based solutions” including Bitcoin futures to cope with the evolving technologies.

Steps to Study the Changing Market

He further stated that the agency has set up its internal stakeholder - LabCFTC - to address the challenges of the drastic changes to be done by the federal regulator in the market.

“Internally, it means explaining technology innovation to agency staff and other regulators and advocating for technology adoption. Externally, that means reaching out and learning about technological change and market evolution, while providing a dedicated liaison to innovators,” the chairman stated.

LabCFTC, which was set up two years ago, already has “over 250 separate interactions” with both big and small companies and conducted “lab hours” at the workplace of the innovators.

However, Giancarlo stressed that the lab is not a sandbox of the agency and does not exempt firms from CFTC regulations.

“It has entered into FinTech cooperation agreements with regulators in London, Singapore, and Australia. It has published well-regarded technology primers and requests for comments,” Giancarlo added.

“I am proud to say that LabCFTC has become a category leader. Every US federal financial regulator has either created or is creating a program similar to LabCFTC.”

Prioritizing Crypto

Last month, the CFTC put cryptocurrencies on its priority list to examine the new asset class in various market divisions.

Similar to the United States commodities market regulator, the Securities and Exchange Commission (SEC) is also in favor of creating a suitable market for the digital assets as, recently, its chairman vouched for self-regulation of the cryptocurrency market.