The current chairman of the US Commodity Futures Trading Commission (CFTC), Timothy Massad, will likely step down early next year. While he recognizes the potential benefits of blockchain technology, his replacement may be even more pro-blockchains.
Also read: New FCA Rules Could Reduce UK Bitcoin Spread Betting Appeal
Massad Sees Blockchain’s Benefits
“The innovations that may be created through financial technology such as blockchain represent another form of change that deserves our attention,” Chairman Massad said earlier this week at the Economic Club of New York.
Last month, at the CME Global Financial Leadership Conference, he revealed that the Commission already has “some work in progress” to update existing rules in anticipation of developments brought about by blockchain technology. “For example, we are looking at the rules describing how books and records must be kept,” he described. The agency recognizes that “these rules are outdated and will simply become more so if and when developments like “smart contracts” become a reality,” he added.
However, he still believes that the technology is “probably still a ways away from meaningful applications” in the derivatives market. Nonetheless, he said:
We must make sure our rules do not stand in the way of its [blockchain technology] potential.
CFTC Under Trump Administration
Massad was nominated by President Obama and sworn-in as CFTC Chairman in June 2014. His five-year term ends on April 13, 2017. However, the Democratic appointee will likely step down once the new administration begins in January, Bloomberg reported.
It is not known when Massad’s replacement will be appointed since the CFTC chief is not considered a front-line job and traditionally not an immediate priority for a new president. However, according to people familiar with the matter, Commissioner J. Christopher Giancarlo, being the only Republican on the Commission, is a leading candidate to lead the regulator in the Trump Administration.
Giancarlo has been a blockchain advocate much more than Massad. “I have been speaking a lot about DLT [Distributed Ledger Technology] recently because I believe in its promising benefits,” he said at a New York conference in May. “I also believe that, in order for this technology to flourish, regulators must take a “do no harm” approach,” he explained, adding that:
In my humble opinion, DLT [Distributed Ledger Technology] could be the biggest technological innovation in the financial services industry and financial market regulation in a generation or more.
At the American Enterprise Institute in September, he said that he believes “the CFTC and its fellow U.S. market regulators must affirmatively embrace innovation.”
Clarity Needed on Digital Currency Regulations
The Commission has held that bitcoin and other digital currencies are “a Commodity Covered by the Commodity Exchange Act” since September 2015. However, last month, Congressman K. Michael Conaway, Chairman of the U.S. House of Representatives Committee of Agriculture, sent Chairman Massad a letter asking him to consider various actions before leaving office.
“Among the many housekeeping actions the Commission could undertake would be to provide additional clarity about the regulation of digital currencies,” Conaway wrote, adding that “Providing the public with more certainty will help to strengthen this new technology and protect the participants of these emerging markets.”
Chairman Massad has not publicly responded to Congressman Conaway. He has been preoccupied with other pressing matters including the controversial Position Limits Rule. If he has not provided clarity on digital currency regulations before stepping down, it will fall into the hands of his replacement.
Do you think the CFTC’s rules will be more blockchain-friendly under the Trump Administration? Let us know in the comments section below.
Images courtesy of Shutterstock, CFTC, Wikipedia, Business Insider
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