Markets Rebound As US CFTC Announces New “Do No Harm” Approach to Cryptocurrency
The crypto markets experienced a significant recovery on news that US regulators confirmed that they intended on adopting a “do no harm” approach when it comes to cryptocurrency regulation in an attempt to meet the demands of the new digital era.
CFTC Chairman Giancarlo: “We owe it this new generation to respect their enthusiasm about virtual currencies with a thoughtful and balanced response, not a dismissive one.” pic.twitter.com/0v4M5gExfc
— Coin Center (@coincenter) February 6, 2018
The United States regulator, the Commodity Futures Trading Futures Commission (CFTC) seems to be adapting to the idea of a future where cryptocurrencies play a more prominent role. The CFTC Chairman recently spoke out on the subject and stated that cryptocurrency regulation should adopt a do no harm approach that is balanced and in tune with the times.
The CFTC Chairman, J. Christopher Giancarlo, presented a written testimony to the Senate Banking Committee which states that the new digital age that has officially arrived since cryptocurrencies appeared on the scene.
Dangers of Stifling Innovation
The testimony notes that cryptocurrencies will bring about a paradigm shift in the current economic landscape, including changes in mindset such as how the public thinks about money and monetary transactions.
Giancarlo also warns against the dangers of stifling this innovative field and condemns this are irresponsible regulation.
During his written testimony, Giancarlo cites the do no harm which was adopted during the early stages of the Internet and applauds this decision as being unquestionably right. Giancarlo continues that this approach is the right one to apply to the development of blockchain technology and other fintech innovations.
The written testimony reiterates that “sound and balanced policy” has the power to ensure that the industry and American market evolves responsibly and sustainably. The testimony concludes that fintech has the power to add to the US’ prosperity.
Going After the Bad Guys
However, this does not mean that the CFTC will not be pro-actively involved in regulation. Giancarlo recalls during his testimony how his agency was responsible for previously prosecuting cryptocurrency-based projects which turned out to be outright Ponzi-schemes such as Coin Drop Markets, My Big Coin Pay Inc, and The Entrepreneurs Headquarters.
Giancarlo maintains that if the CFTC together with other US regulators remains vigilant, they can protect American investors from dishonest and fraudulent projects while still allowing legitimate companies to grow and thrive in the American market.
The written testimony also addressed the issue of self-certified bitcoin futures contracts, which was at the receiving end of much criticism from Wall Street.
Giancarlo merely stated that it was the responsibility of the cryptocurrency exchanges and all other parties involved to address the growing criticism regarding their products.
The Chairman, however, did add that his agency will provide a Review and Compliance Checklist for all futures contracts.
According to Giancarlo, this Checklist will require cryptocurrency futures products providers to disclose all information regarding the steps they’ve taken to the CFTC to ensure the safety of their investors.
Lastly, the CFTC will scrutinize the governance involved in these futures contracts in order to provide guidance to develop optimum futures products in the future.
Only time will tell if this news will turn truly reverse the dramatic downturn the crypto markets have experienced over the past few weeks.