On September 20, 2017, J. Christopher Giancarlo, chairman of the Commodity Futures Trading Commission (CFTC) spoke at the American Council for Technology and Industry Advisory Council’s Blockchain Forum. He bemoaned the outdated state of financial regulation, but expressed hope that blockchain technology might enable government oversight.
“Finance and markets have been digitized, everything has been digitized. Everything you do, the way you hail a cab has been digitized. The one thing that hasn’t been digitized is regulation,” said Giancarlo. “We are still very much an analog regulator of digital markets.”
He further expressed that distributed ledger and blockchain technologies “are going to challenge orthodoxies that are foundational to our financial infrastructure,” according to CoinDesk. "Whether it's the promise of blockchain-enabled digital identities, improved regulatory reporting and surveillance, greater efficiency in clearing and settlement processes, more transparent flow of information – these innovations hold promise in benefiting the American public,” added Giancarlo.
The chairman went into some detail when speaking about the Dodd-Frank Act.
“The banks are going to real-time trade capture. And with a blockchain, they will record that on their [node] and other banks will record it,” said Giancarlo according to FedScoop. “And if we were there, we would be able to see all of the financial institutions’ positions in real time as they do the trade, which is what Dodd-Frank aimed to get at.”
Giancarlo counterbalanced his remarks, adding, “Current enthusiasm for certain cryptocurrencies shouldn't blind investors and regulators to the many risks that are evolving in this space.”
It’s worth noting that the CFTC has given stamps of approval to a cryptocurrency derivatives trading platform. LedgerX recently received registration as a derivatives clearing organization and swap execution facility.