The Chairman of the US Commodity Futures Trading Commission (CFTC) has expressed his support for a CFTC node on a blockchain-based trading system, but says there are too many regulatory hurdles in the way.
Speaking at a Congressional hearing yesterday, Christopher Giancarlo said he had been approached by banks and service providers who are exploring a blockchain trading system for credit default swaps. He told the hearing that he loves the idea and wants to make it happen, but he can’t because it would be viewed as a gift to the CFTC and therefore legally forbidden.
“So I say, ‘What’s the dollar amount, can we use it from our budget?’ No, because it will need to go through an appropriations process or they’ll need to compete with other firms. By the time we go through all that, this thing has already launched.”
Giancarlo argued the US is four years behind the UK in blockchain development. The Bank of England, for example, recently announced it is launching a new bank-to-bank payment system that will be blockchain compliant.
“So I feel like we’re four years behind because we do need to test it, we do need to understand it, we need to see how it can help us do a better job as regulator before I can come to Congress and say, ‘OK, we need money to build something’,” he said.
Giancarlo suggested the CFTC Research and Development Modernization Act would allow the agency to participate in FinTech projects like blockchain without having to pay for them.
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