Back-to-back panels on Blockchain, Cryptocurrencies and Regulation was hosted by the Technology Advisory Committee of Commodity Futures Trading Commission (CFTC) recently. The meeting was attended by bigshot figures belonging to both private and public sector corporates. The participants mostly wished to clear out the issues regarding market, new technologies and role to be played by regulators in the development of technologies. Just prior to recess, the committee gave a green signal to the creation of two subcommittees one of which shall cater to cryptocurrencies while the other will look after the application of distributed ledger technology in finance sphere.
Brian Quintenz spoke about the necessity of self-regulatory efforts by stating that:
“The CFTC should not attempt to make value judgments about which new products are worthwhile and which are not – the markets, investors, and consumers need to decide that for themselves.”
He had taken a similar stand at the Yahoo! Finance All Markets Summit: Crypto conference held in New York last week. Various panel participants argued that the new regulations were imperative for accommodating technology usage in financial sector particularly in the infrastructure division.
Dan Busca, the deputy director of the CFTC’s Division of Market Oversight pointed out that:
“The futuristic visions of regulatory oversight must incorporate DLT as it continues to improve and mature. Trying to adapt a system to meet regulations as an afterthought is often costly and inadequate.”
It was later suggested by Busca that blockchain can be used by regulators as a potential tool for feeding real-time information to the system. Busca added that:
“The evolution of DLT could allow regulators to access data seamlessly every time a trade is posted on a particular blockchain without the need for human intervention or intermediaries,” which in turn, would make the CFTC more “nimble and efficient
Private Sector view
Members belonging to the private sector articulated mixed views on Blockchain and Cryptocurrency regulation as well as the extent of involvement of the regulators. Charley Cooper, the managing director of R3, requested the regulators to increase their level of involvement in cryptocurrency and blockchain industries by stating that:
“We would ask as passionately as possible for the U.S. regulators and members of the agencies of the government to become more active than you already are. I can tell you that there are federal governments around the world that are way outpacing the U.S. government. And that’s a concern.”
On the other hand, Brian Knight, a senior research fellow at George Mason University’s Mercatus Center, issued concerns regarding the growing dominance of crypto regulators by asking the committee:
“If we’re going to have the regulator serve as a kind of consultant, how do we make sure that’s fair?”
The Technology Advisory Committee revealed that it will continue in its path of technology exploration as it shall have a “transformative impact on trading, markets and the entire global financial system.”
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Tarunima Ghosh Laha is a Finance Post Grad from St. Xaviers who believes Finance is more than just Balance Sheets and Ledger creation. This filmy bookworm who believes she was a sloth in past life also nourishes a penchant of owning a private zoo someday. Equipped with a laptop and online Lexicon she is all set to give finance a glamorous makeover in the form of exciting writeups with bang on info and flashy new words.