Blockchain technology could help the Commodity Futures Trading Commission do a better job in regulating derivatives markets, according to its chairman.
“The ability to digitize rule-sets and consume, process and analyze data in real-time could very well be the capability that allows us to explore application of so-called ‘agile regulation,'” J. Christopher Giancarlo said in a speech at the D.C. Fintech conference.
When paired with systems inspired by digital ledger technology that “standardize and distribute data to market actors – and even regulators – we begin to see a world where the majority of standard tasks are managed by machines,” Giancarlo said.
In May before a congressional committee, Giancarlo said the U.S. was “falling behind” other countries in its blockchain efforts and placed some of the blame on the CFTC’s own rules.
Trading markets are changing “from analog to digital, from human to algorithmic trading and from stand-alone centers to interconnected trading webs,” he said. “Emerging digital technologies are impacting trading markets and the entire financial landscape with far ranging implications for capital formation and risk transfer.”
The CTFC has created a Virtual Currencies Subcommittee and a second subcommittee on distributed ledgers to help it as the federal agency weighs potential regulation of cryptocurrencies. Read more here.