June 23, 2024

CFTC Chairman Recommends A ‘Do No Harm’ Approach In Regulating Cryptocurrencies

CFTC Chairman Recommends A 'Do No Harm' Approach In Regulating Cryptocurrencies

J. Christopher Giancarlo recently talked about Crypto regulations and indicated that he supports a favored approach that would allow the new industry to grow. The Commodity Futures Trading Commission Chairman compares the sector with internet and is of the opinion that lack of strict regulations is what helped the internet to grow, as we know it today. Many countries have been unable to follow South Korean, Malta, and Japan among others in establishing Crypto regulations.

New Technologies Need A Favorable Approach

Various jurisdictions and agencies are confused on how they will handle Cryptocurrencies. Whereas only a few have taken the bold step to ban, some have chosen to regulate the sector while others have adopted a wait-and-see approach. Regardless, the emergence of the new currencies is comparable to that of the internet a few decades ago.

According to J. Christopher Giancarlo, the Cryptocurrency sector needs to be handled in a favorable manner. The Commodity Futures Trading Commission Chairman observes that when internet emerged, it was something new that most authorities didn’t know how to handle it. Nevertheless, their minimal role in the sector helped it to grow and expand. He advises that the same should be done with Cryptocurrencies.

Giancarlo is of the opinion that Cryptocurrency is still a new technology and its advantages and disadvantages are difficult to establish at the moment. Therefore, the young technology should be handled in the same way as the internet some time back. He advises the digital assets and everything that has to do with it to be given time to mature.

Some Regulations Are Important

Having some regulations in the sector can help in addressing some serious issues that may tarnish the name of the Cryptocurrencies and discourage their use. Giancarlo believes minimal regulations are important to discourage the use of the virtual currencies for fraud. Manipulation should also be checked to ensure that the investors don’t lose money in fake projects. He advises authorities to be slow and well-informed when it comes to making policies touching the technology.

CFTC’s History With Cryptocurrencies

CFTC is an agency that regulates the derivatives, futures, and commodity market. As such, it has been involved with Cryptocurrencies for some time. In 2015, the body said that the virtual currencies should be treated as commodities. In March this year, a federal judge supported this view when he ruled that the digital assets could be regulated as a commodity by the agency.

CFTC and Securities and Exchange Commission have all expressed the need to control fraud in the virtual currencies market. They have been advising consumers to be careful when investing in the sector by carrying out comprehensive research when investing.

Nevertheless, CFTC has maintained a positive view of Cryptocurrencies for a long time. Fostin Benham said that the virtual currencies are here to stay during the BFI Summit in New York in June. According to the statement, Benham said that the virtual currencies will establish their rightful positions in every economy worldwide. The agency believes that the virtual currencies are products of a technological revolution hence the need to preserve them by putting in place friendly policies.

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