Commissioner J Christopher Giancarlo of the Commodity Futures Trading Commission (CFTC) said today that he believes the government agency should reexamine existing rules as necessary to foster innovation with blockchain technologies.
Giancarlo’s remarks on the possibility of revisiting CFTC regulations in light of new blockchain applications came as part of a keynote address at the DTCC Blockchain Symposium today, in which he discussed his view on the implications of blockchain and distributed ledgers for regulators.
Evoking comparisons to the Internet, Giancarlo went so far as to suggest that regulators such as the CFTC, the primary US regulator for options and futures markets, could drive jobs related to emerging technologies like blockchain to friendlier jurisdictions should they fail to adopt a ‘do no harm’ strategy as they did for the early Web.
"US lawmakers concerned about the loss of jobs, especially in the New York area, should look to provide similar space for DLT innovation and the well-paying jobs that will surely follow. American advancement in the Internet was enhanced by a do no harm approach."
Giancarlo cited CFTC regulation 1.31, which deals with its rules for the keeping and inspection of books and records, as one rule that may need to be revisited. In particular, rule 1.31 mandates the storage of records in "either micrographic or electronic storage media".
"I believe the CFTC should revisit this rule … promote the efficiency and accuracy of recordkeeping … and examine as necessary rules that may inhibit distributed ledger technology innovation," he said.
Elsewhere in the conversation, Giancarlo spoke broadly about the potential of distributed ledger technology to revolutionize a variety of business processes, noting that his statements represent his own views and not those of the CFTC.
He used this larger narrative to issue a call to action to international regulators, arguing that they should coordinate to reduce burdens for industry startups and firms.
"I believe regulators and policy owners have a choice, we can burden [innovators] with multiple regulatory schemes or we can come together to encourage distributed ledger investment and innovation," he stated. "I favor that later approach."
He went on to cite the work being conducted by regulators such as the International Organization of Securities Commissions (IOSCO) and Japan’s Financial Services Agency (FSA), which he lauded as having progressive stances on the technology.
Giancarlo argued that regulatory bodies should collaborate to better understand how they might take a combined approach to industry, concluding:
"Issues around distributed ledger technology must be dealt with at the multilateral level."
CFTC image via Shutterstock