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Believers in the transformative power of the blockchain have labeled the rise of bitcoin
BTCUSD,
and other cryptocurrencies a revolution, implicitly placing financial industry incumbents and federal regulators in the role of anxious reactionaries.
Former Commodity Futures Trading Commission Chairman Chris Giancarlo made the analogy explicit Tuesday when he called the Biden administration’s approach to the crypto industry as a “highly defensive and reactionary,” in remarks at the American Enterprise Institute.
Giancarlo said the Biden administration’s recent report on stablecoin regulation shows that the White House is more concerned about “what could go wrong, rather than what could go right if innovation is properly channeled,” while failing to “declare any national imperative to harness digital-asset innovation to upgrade our creaky exclusive financial system to expand inclusiveness and lower costs for new generations of Americans.”
Giancarlo, who was first appointed as a Republican commissioner at the CFTC by President Obama, and then elevated to the role of chairman by President Trump, launched the Digital Dollar Project after leaving public service in 2019 to promote the creation of a Fed-backed central bank digital currency.
Read more: Fed needs to ‘wake up’ to the need for a digital dollar, says former CFTC head Giancarlo
“I believe we can harness this wave of innovation…for greater financial inclusion, capital and operational efficiency and economic growth for generations to come,” he said. “But if we do not act, this coming wave of the internet will lay bare the shortcomings of our aged analog financial systems, with potentially disruptive impact on our western economies.”
Giancarlo has supported recent work done by the Federal Reserve Bank of Boston, in collaboration with the Massachusetts Institute of Technology, to develop open-source code that could back the creation of a digital dollar. The Fed has promised a report that will examine the benefits and risks of issuing a central bank digital currency, but it remains unfinished despite Chairman Jerome Powell’s assurances in September that it would be released “soon.”
The former regulator also believes that Congress must act to streamline regulation of private cryptocurrencies by creating a new bureau to be run jointly by the Securities and Exchange Commission and the CFTC. In remarks Tuesday, he argued that Congress should transform the cryptocurrency working group he created with then SEC Chairman Jay Clayton and “develop it into a crypto bureau which would have joint parentage of the SEC and the CFTC but would have its own authorization, and its own financing.”
Giancarlo argued that this approach would take seriously the fact that neither the Senate Agriculture Committee, which oversees the CFTC, nor the Senate Banking Committee, which oversees the SEC, will either vote to give away their powers to affect regulation of the emerging crypto space.
