CFTC Commissioner Christopher Giancarlo believes that the current period of innovation makes it challenging to approve proposals like Bakkt.
The U.S. Commodity Futures Trading Commission (CFTC) is an independent agency of the US government created in 1974, that regulates futures and options markets.
Bakkt had promised prospective clients it would request permission from the CFTC to provide the first Bitcoin futures that would be physically deliverable daily, as well as storing clients Bitcoin in a physical warehouse on their behalf. The CFTC suggested that Bakkt registers as a trust company to circumnavigate stalling compliancy issues.
With the news that the Intercontinental Exchange (ICE), the owners of the New York Stock Exchange, is now attempting to facilitate the launch of its delayed Bakkt platform by obtaining a New York cryptocurrency license, the complications that new crypto projects face are a sign of the times according to Giancarlo, who clarified the difficulties:
“The first is that we live in a period of exponential technological change. That is, the sheer speed of innovation has increased exponentially, both in terms of production of new models and products and their subsequent public adoption.”
Giancarlo makes it clear that the pace of change within the industry means that regulators simply can’t catch up with new innovations without what he calls “heightened technological literacy across leaders in business and government.”
However, he points out that cryptocurrency innovation could have saved the 2008 global financial crisis, commenting, “Today I want to take stock of the current state of blockchain technology and renew a focus on how it can impact – and improve – our markets,” adding:
“But imagine what a difference it would have made a decade ago on the eve of the financial crisis if regulators had access to the real-time trading ledgers of large Wall Street banks, rather than trying to assemble piecemeal data to recreate complex, individual trading portfolios.”
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