U.S. CFTC chairman Christopher Giancarlo said that the “explosion in interest” in cryptocurrencies will likely lead to new applications for clearinghouses.
The United States Commodity Futures Trading Commission (CFTC) chairman Christopher Giancarlo said that the “explosion in interest” in cryptocurrencies will likely lead to new applications for clearinghouses. Giancarlo delivered his comments in a speech published on May 1.
In his testimony to the House of Representatives Committee on Agriculture Subcommittee on Commodity Exchanges, Energy and Credit in Washington, D.C., Giancarlo said:
“The Commission anticipates new applications for clearinghouse registration resulting from the explosion of interest in cryptocurrencies; an area in which protection of the cryptocurrencies will be one of the highest risks.”
A clearinghouse is a financial institution that operates as an intermediary between two entities in a financial transaction, ensuring that the entire process goes smoothly, with the buyer and seller follow their contract obligations. Giancarlo also stated that the agency is set to conduct increased examinations of clearinghouses to better identify issues that may affect their ability to control associated risks.
Addressing the monitoring and regulation of technological developments, including blockchain and digital currencies, Giancarlo also said that the agency follows four cornerstones. Those include the adoption of “exponential growth mindset,” becoming a “quantitative regulator,” embracing “market-based solutions,” and establishing an internal Fintech Stakeholder to address related opportunities and challenges.
In early April, Giancarlo — who is expected to be replaced this year by the U.S. president’s nominee for the CFTC chairmanship, Heath Tarbert — emphasized the agency’s commitment is to monitor, but not interfere with the development of the crypto sector. He noted that the CFTC is committed to making its own rules and regulations simpler, less cumbersome and less costly for market participants.
Previously, the CFTC chair stated that “the disintermediation of traditional actors and business models” as a key factor that challenges existing regulatory models, isolating blockchain and cryptocurrencies as two key phenomena that are changing contemporary markets.
Source: , CoinTelegraph
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