Christopher Giancarlo, the current chairman of the Commodity Futures Trading Commission (CFTC), has metaphorically waved the crypto flag in a draft testimony before the Senate Banking Committee.
“What a difference it would have made on the eve of the financial crisis in 2008 if regulators had access to the real-time trading ledgers of large Wall Street banks, rather than trying to assemble piecemeal data to recreate complex, individual trading portfolios…
It certainly would have allowed for far prompter, better- informed, and more calibrated regulatory intervention instead of the disorganized response that unfortunately ensued.” Giancarlo says.
Going through a raft of potential benefits, Giancarlo says blockchain technology will likely have:
“Broad and lasting impact on global financial markets in payments, banking, securities settlement, title recording, cyber security and trade reporting and analysis.
When tied to [digital] currencies, this technology aims to serve as a new store of value, facilitate secure payments, enable asset transfers, and power new applications.”
Do no harm, he tells congressional representatives, other civil servants, and the wider public. Suggesting that like the internet, blockchain technology “was to progress through human social interaction; voluntary contractual relations and free markets; and governments and regulators were to act in a thoughtful manner not to harm the… continuing evolution.”
The only senior civil servant in America with the foresight to see the extent of this innovation, Giancarlo further says:
“One study estimates that [blockchain technology] could eventually allow financial institutions to save as much as $20 billion in infrastructure and operational costs each year.
Another study reportedly estimates that blockchain could cut trading settlement costs by a third, or $16 billion a year, and cut capital requirements by $120 billion.
Moving from systems-of-record at the level of a firm to an authoritative system-of-record at the level of a market is an enormous opportunity to improve existing market infrastructure.”
In a subtle criticism of the SEC, he says they have been “taking increasingly strong action against unregistered securities offerings,” before he closes with a thundering statement:
“We are entering a new digital era in world financial markets…. [digital] currencies mark a paradigm shift in how we think about payments, traditional financial processes, and engaging in economic activity… new technologies will allow American markets to evolve in responsible ways and continue to grow our economy and increase prosperity.”
CFTC was one of the first regulatory body to examine cryptocurrencies. They held a public hearing in 2014 when some from the CFTC remarked the level of interest was so high they had never seen anything like it.
That experience seems to have given Giancarlo motivation to look and see just what exactly is all this, with he so finding it to be good, even declaring in 2016 blockchain tech could have averted the 2008 collapse.
Since then, they have approved the world’s first regulated bitcoin futures, with some seeing Giancarlo as the thought leader in America’s balkanized regulatory civil service.