CFTC Tells Congress They Are “Falling Behind” on Blockchain Regulations
Head of CFTC: Organization “Falling Behind” on Blockchain Technology
The cryptocurrency community continues to watch with great interest as the United States deliberates the future of blockchain technology. The work of key regulators in the country right now will be incredible predictors of how the cryptocurrency markets will fare in coming years. Over-regulation could be deadly, especially considering the heavy reliance of the global market on the participation of United States investors, traders, and creators.
But the complicated nature of regulatory authorities in the United States has meant a substantive stalemate for both sides of the argument. The Securities and Exchange Commission (SEC) sometimes claims regulatory authority over certain cryptocurrencies, whereas the CFTC, or the U.S. Commodity Futures Trading Commission, is oftentimes given the last word on regulatory matters.
With this in mind, recent remarks from the head of the CFTC might shed some light on the current sentiments of regulators regarding the quickly-evolving blockchain technologies which drive the cryptocurrency trading and securities markets all over the world.
In a speech given to the Congress’ House Committee on Agriculture, Christopher Giancarlo, the Chairman of the regulatory commission, responded at-length to a question from a reporter regarding blockchain technologies. He outlined that there are certain problems associated with current laws which might interfere with efforts for the agency to effectively understand and regulate the blockchain.
Specifically, the regulator espoused his concern that the CFTC is unable to operate its own node on the blockchain if the chain is operated by a bank, even if the institutions were to invite the CFTC to do so for regulatory purposes. The reason for this is that, under current laws, the commission is not allowed to accept gifts—and this financial information is considered a gift.
Additionally, the CFTC is not allowed to operate its own node because it would need to go through congress to be appropriated the technology and funding properly. By the time this happens, he outlined, “this thing is already launched.”
But participating in the launch of blockchain technology is a key prerogative of the commission. The CFTC wants to be able to monitor financial data that is filtered through the blockchain, an ability which would allow the CFTC to gather more information and data on precisely how the financial tools function in the modern day. Consequently, the commission is working hard to try to find a way to run the node they so desperately need in order to effectively regulate.
Solutions in Legislation
The Chairman announced his support for Representative Austin Scott’s bill, being introduced on the house floor soon. The bill will provide the CFTC with the right to accept data that is willingly shared with them from financial institutions on the blockchain. In his supporting statement, the regulator outlined that the United States is “falling behind” other countries.
In particular, he pointed to Great Britain as an example of a country that has been incredibly effective at responding to the changing financial landscape given by blockchain tech. The Bank of England announced just two days ago that they will be integrating blockchain tech into a brand new bank-to-bank system for payments and other financial transactions.
Representative Michael Conaway responded with his own take on the catch-22 faced by the institution, lamenting that while the CFTC is not allowed to legally demand info and data after the blockchain has already been launched, they are currently prohibited from attaining the info before the launch occurs as well.
The CFTC faces several notable obstacles prior to a successful regulation of important blockchain technology within the United States. The Chairman’s vocal frustrations represent the culmination of a continuing struggle on the part of the agency as they try to respond to the moving target of blockchain and cryptocurrency securities exchange.