U.S. Commodity Futures Trading Commission: Distributed ledger regulations should be reviewed

J Christopher Giancarlo, a member of the U.S. Commodity Futures Trading Commission (CFTC), said that in order to promote blockchain technology innovation, government agencies should review existing policy measures.

J Christopher Giancarlo

Giancarlo made this important speech at the DTCC Blockchain Symposium, sharing his own thoughts on what distributed ledgers and blockchain technology mean for regulators.

His comments led to comparisons between blockchain and the internet, and he went on to suggest that regulators such as the CFTC should adopt a friendly jurisdictional policy towards emerging technologies such as blockchain, if not the same do-no-harm approach they adopted with the early internet.

“U.S. lawmakers concerned about job losses, especially in the New York area, should provide the same policy space for distributed ledger technology and high-paying jobs. The development of the U.S. internet has benefited from the government’s do-no-harm approach.”
Giancarlo cited Section 1.31 of the CFTC regulations regarding the retention and inspection of books and records as a section that should be amended, especially because Section 1.31 limits the storage of records to “microscopic storage media or electronic storage media.”

“I believe the CFTC should review and revise this regulation to improve the efficiency and accuracy of record keeping because these rules could hinder innovation in distributed ledger technology.”
Giancarlo has spoken extensively elsewhere about the potential for distributed ledger technology to transform business processes, and said those were his own views and not those of the CFTC.

The reason why he discussed this topic so extensively is to call on international regulators to take action and work together to reduce development pressure on startups and other companies.

“I believe regulators and policymakers have a choice: they can crush innovators with a barrage of regulations, or they can encourage distributed ledger technology investment and innovation all together. I personally certainly support the latter option.”

He went on to list a number of regulators that have taken progressive stances on the technology, such as the International Organization of Securities Commissions (IOSCO) and Japan's Financial Services Agency (FSA).

Giancarlo believes regulators should work with each other to better understand what joint response strategies to take.

“Issues related to distributed ledger technology should be resolved multilaterally.”