Fearing USD Decline, Ex-CFTC Heads Propose a Blockchain-Based Digital Dollar

Two former ranking members of the CFTC offered up a plan for a government-sanctioned, blockchain-based digital dollar.

AccessTimeIconOct 16, 2019 at 5:00 p.m. UTC
Updated Sep 13, 2021 at 11:35 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Two former heads of the Commodity Futures Trading Commission (CFTC) are offering up a plan for a government-sanctioned, blockchain-based digital dollar.

In an op-ed for the Wall Street Journal published Oct. 15, J. Christopher Giancarlo, former CFTC chair, and Daniel Gorfine, former director of LabCFTC, the watchdog’s experimental initiative, proposed a blockchain protocol to digitize cash To allow the dollar to compete “in the new digital era.”

Their USD-backed stablecoin is envisioned for daily transactions both domestically and abroad.

Created and administered by a non-governmental group, the program would be dependent on participation from the Federal Reserve, commercial banks, nonbank intermediaries, technology companies and social-media platforms.

Though reliant on “trusted, regulated intermediaries to maintain digital wallets and validate transactions,” this distributed ledger payment system would hold advantages over the current monetary system.

In particular, Giancarlo and Gorfine highlighted the higher transaction speeds, the ability to make micropayments, as well as increased security and transparency enabled by cryptocurrencies.

Beginning with a pilot, Giancarlo and Gorfine recognize that “no perfect solution exists to address the challenges and promises of digital currency, nor can anyone predict all the technological advances these efforts will generate.”

At the practical level, cash exchanged for these digital units could be escrowed by the Fed. They also point to the possibility of having multiple competing wallet providers.

Giancarlo and Gorfine warned that ongoing experimentation with cryptocurrencies by central banks and corporate actors could “erode the dollar’s status as the most popular currency for international exchange.”

According to the ex-regulators, the risks of letting the greenback lose monetary supremacy are systematic. Price stability, efforts to combat illicit finance and the global appetite for U.S. government debt would all falter.

in August after spearheading the upstart agency to found Gattaca Horizons, a consultancy group for fintech firms.

Following a five-year stint at the CFTC, where he took a “do no harm” stance towards blockchain oversight, Giancarlo joined as an advisor to the Chamber of Digital Commerce, a trade group focused on blockchain and crypto policy in the U.S., last month.

J. Christopher Giancarlo photo via CoinDesk archives


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.