The chairman of US Commodity Futures Trading Commission comments on cryptocurrencies via a speech on 1st May. According to Christopher Giancarlo, there is considerable interest among people for cryptocurrencies. As a result, it will lead to huge applications for clearinghouses.
Further, Giancarlo says in his testimony that the Commission is in anticipation for clearinghouses registration for new applications. It will result in an explosion of interest for cryptocurrencies. He also reminds us that the explosion will be in the area in which crypto protection is risky. Giancarlo gives this statement to the House of Representatives Committee. As per matter of fact, the committee is on Agriculture Subcommittee on Commodity Exchanges, credit and Energy.
A clearinghouse refers to a financial institution operating as a bridge between financial transaction entities. It ensures that the overall process of transaction runs smoothly. Such institutions guide sellers and buyers to follow contract obligations. Giancarlo added that the involved agency conducts an assessment for clearinghouses. As a result, better identification of issues happen. And, the authorities might also be able to control the risks associated with cryptocurrencies. As cryptos are highly volatile, such regulatory must keep an eye on them.
Four cornerstones of the Agency to monitor the technological developments
Giancarlo while addressing the regulation and monitoring, says that agency always follows four cornerstones. He includes digital currencies and blockchain in the list of technological developments. According to him, the four cornerstones include the adoption of a growth mindset, the establishment of Internal Fintech Stakeholders. Further, it will include becoming quantitative regulator and embracement of market solutions. These cornerstones will address challenges and opportunities.
Giancarlo emphasized certain things about crypto, in April. He said that the agency would monitor but not interfere with crypto sector’s development. As per matter of fact, the CFTC chairmanship nominee is to replace Giancarlo. The nominee is Heath Tarbert. Furthermore, he says that CFTC will simplify its rules and regulations. It is because; through this way market participants will get involved in it.
Previously, the chairman of CFTC stated the matter. He said that through disintermediation of business models, it challenges the regulatory models. Furthermore, it will also isolate crypto and blockchain. It is because these two things are rapidly changing contemporary markets.
Giancarlo explains CFTC’s Mission for open and transparent markets
In his testimony, Christopher Giancarlo explained the mission of CFTC. He says that its mission is to provide transparent, open, and competitive markets. It also features financial sound technologies into the market. He adds that the commission has the aim to save users of the crypto market by protecting their funds. The commission not only provides protection but also safety from abusive practices, fraud, etc. They will also monitor all the related practices and products that come under the Commodity Exchange Act.
As per matter of fact, the establishment of CFTC took place in the year 1974. It assumed the responsibilities that the Department of Agriculture regulated since the 1920s.
After 2008, former US president Obama together with Congress framed the authority of CFTC. They formed the Dodd-Frank Act to oversee the swaps market in the US. It also included future markets of exchange trades.
Read Also: Vietnam to get its first fully regulated crypto exchange soon