Bitcoin and many other cryptocurrencies have elements of all asset classes. This makes it very complicated for regulators to come up with a comprehensive regulatory framework for this industry. That’s according to the US Commodity Futures Trading Commission (CFTC) chairman, Chris Giancarlo, in an interview with CNBC. He added that as a regulator, he doubts there will be a solution in the near future, as most of the statutes that are being applied today by regulators were formulated over 70 years ago. That makes it difficult for one to regulate new and advanced technological innovations like Bitcoin.
Fostering Innovation And Expected Legislation
Giancarlo discussed the CFTC’s role in nurturing Bitcoin and blockchain technology, saying that the CFTC has always been one to support innovation.
As a regulatory agency, our agency, the CFTC has often been [at] the forefront of technological revolution. It’s part of our DNA as an agency. We try to apply our statute[s] [using] a principles-based approach. We look at the core principles and apply [them] to new innovations.
Giancarlo is optimistic that Congress will come up with a regulatory policy for the crypto industry in the near future as the need to regulate the sector rises. He, together with the SEC chairman, Jay Clayton, recently testified in front of the House Banking Committee, and it’s up to the lawmakers to decide whether or not new laws should be formulated for the crypto industry. His optimism stems from the conversations he’s had with some senators and congresspeople which indicate a growing appetite for some rethinking regarding cryptos.
I think you will see going forward, perhaps this Congress or [a] future Congress, an attempt to deal with this innovation…. Bitcoin has been around for 8 or 9 years, but the fact of the matter is it’s still relatively new for us as a regulatory agency and it’s going to take some open-mindedness, some new way[s] of thinking about it, for us to get our heads around it.
Regulation Is Still A Grey Area
The remarks come barely a week after the former CFTC chair, Gary Gensler, said in an interview with The New York Times that he considers Ether and XRP to be non-compliant securities. If the CFTC were to take such a stand against the two most valuable altcoins in the crypto industry, it would become illegal to trade them on most of the exchanges currently offering them. Gensler did, however, state that Bitcoin would probably be exempted from this classification, as it was not issued via an ICO and has a decentralized network of developers.
Such is the ambiguity in regulations that has turned out to have hurt the crypto markets greatly. In the interview, Giancarlo also stated that the CFTC and the SEC are not in a position to make any laws, and that the two agencies can only enforce whatever laws Congress puts in place. He has in the past voiced his support for both Bitcoin and blockchain technology, unlike other key figures that have openly opposed Bitcoin but supported the technology behind it.
It seems that despite the long wait, a definitive regulatory framework isn’t as close to becoming a reality as many of us would want.
