CFTC chair says the regulator is falling behind in blockchain research
The head of the Commodity Futures Trading Commission (CFTC) said on Wednesday that he felt the regulator was four years behind in its knowledge of blockchain technology because of the research restrictions placed upon it.
CFTC chairman Christopher Giancarlo said that agency lacked the legal authority to partner and collaborate with outside entities engaging directly with financial technology (fintech) and innovation.
Restrictions on collaboration
Giancarlo said the CFTC was effectively barred from taking part in trials and research of blockchain and other fintech innovations because free exchange of information between the agency and outside businesses or research facilities could be legally considered a gift – which the regulator is forbidden from accepting.
“The Commission would like the ability to partner, collaborate, or engage in a co-operative agreement regarding emerging financial and compliance technologies,” Giancarlo told representatives of the House Committee on Agriculture.
While it may be barred from collaboration, the CFTC launched its own research facility in May 2017, called LabCFTC, to “promote responsible fintech innovation and fair competition for the benefit of the American public”.
When asked by Congressman Austin Scott about the unit’s goals, Giancarlo said: “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.”
Four years behind
He emphasised, however, that collaboration remained important if the CFTC was to stay ahead of the curve on blockchain and cryptocurrencies – a regulatory grey area in US that falls somewhere in between the oversight of the CFTC and the Securities Exchange Commission.
“We’re falling behind,” the CFTC chairman said, citing the example of research carried out by the Bank of England that has led to the upcoming launch of a blockchain-compliant, bank-to-bank payment system.
He added: “They’ve had the last four years to participate in all these blockchain beta tests that we’ve not been able to participate in. So I feel like we’re four years behind.”