CFTC Chair J. Christopher Giancarlo outlined how the agency is attempting to address new technology and business models.
In a speech at the Italian Companies and Exchange Commission (CONSOB), Mr. Giancarlo stated that the current period of innovation poses unique challenges. Specifically, regulators are struggling to address (i) the increased speed of innovation in new models and products, as well as their public adoption, (ii) the decentralization of traditional intermediaries in relation to crypto-related activities and (iii) the heightened levels of technological literacy necessary to understand developing technologies.
Mr. Giancarlo emphasized that regulators should engage with these innovations, emphasizing the potential benefits of blockchain technology for the financial sector. Mr. Giancarlo also outlined the CFTC's approach to responding to such technological developments. Specifically, Mr. Giancarlo said that the CFTC:
- adopted an "exponential growth mindset," to correspond to rapid changes in technological innovation and market adoption;
- created LabCFTC, to help the CFTC understand and address technological developments;
- began the process of becoming a "Quantitative Regulator" that uses "robust data collection, automated data analytics, and artificial intelligence"; and
- embraced market-based solutions, thereby enabling the market to determine the value of technology-driven innovation.
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