Many in the past have drew comparisons between the internet and cryptocurrency revolutions for various factors, but mainly the huge spurt of financial inclusion that both had ushered in. Now after the internet, development in the cryptocurrency industry could lead to the next wave of innovation that will drive economic growth, according to the former head of the United States Commodities Futures and Trading Commission (CFTC).
In an interview with Yahoo! Finance, ex-CFTC regulator Chris Giancarlo, who’s now the co-founder of the Digital Dollar Project, said that the sudden productivity boom that the post-lockdown era ushered in could be stabilized through digital currencies, thus putting the economy on a path to far more sustainable growth.
Cryptocurrencies could also prove to be the key to creating a fully networked digital economy that functions globally, according to Giancarlo, who believes China is the first to do this by adopting a CBDC. He said,
“All transactions in their economy, whether it be securities transactions, future transactions, commercial lending, commercial payments, retail payments, will be fully networked with their digital currency as almost the software operating system for a digital economy.”
This will benefit China extracting huge amounts of percentage points out of cost and latency out of its economy, pushing it into hyperdrive in terms of speed and efficiency. The Chinese CBDC pilot project is already running at full speed, with many companies driving adoption and use cases through hugely innovative projects and integration.
Cryptocurrencies are also solving many other issues posed by traditional financial institutions, such as low-interest rates and high transaction costs, leading to many in the West migrating to DeFi ecosystems to gain higher yields on their savings and investments.
Calling these unwarranted costs a “burden on the economy,” the former regulator further questioned,
“The cost of transactions cost Americans 5% or 6% a year of GDP…are we going to allow our money as well to fall behind the times, when the rest of the world is moving rapidly forward and creating digital tokenized based money?”
However, even as he believes that the U.S. is in a space race when it comes to virtual currencies, he still wasn’t sure if the adoption of a CBDC in the near term would be the best course of action. Albeit, it did need to be at par in terms of innovation so as to not be left behind.
Just last week, Fed Chair Jay Powell had revealed that the Fed was weighing the pros and cons of a Digital Dollar and will present a white paper on the same soon. However, they were in no rush to release one as of now, as it was “more important to do this right than to do this fast.”
The way forward for countries including the U.S. in the coming decade would be by creating sovereign digital currencies, said Giancarlo, adding that it will be useful in paying taxes and other government obligations, while also being the dominant form of payment systems in most economies. However, CBDCs will only work if the privacy of Americans is ensured, he opined, adding that,
“If they censor their transactions— if one government comes in and says, well, we’re going to disallow it, as China’s doing, they’re going to be able to disallow certain transactions. If governments start using digital money as a political plaything, they’ll destroy value in it.”
But innovation itself will only take root if mandatory regulations are in place, according to Giancarlo, who said that he “believes in regulation” but “we’ve got to get it right”. He explained,
“I believe that the emergence of crypto is very big. This is a multi-generational change in the nature of finance and the nature of money. The question is what is the right regulatory envelope for it to fit into.”
To that end, he believes many of the existing regulations in the country are archaic, and while certain parts could be applied to the crypto world, the space also requires new rules. If the rules introduced in the 1930s are applied to this novel asset class, it could lead to the stifling of innovation, he noted.
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for FY 2024
Investigative priorities are dedicated to identifying potential fraud, ensuring integrity, and identifying proactive leads. Following staff departures in FY 2022 and FY 2023, we are in the process of hiring and also seeking assistance from other OIGs.
What is the budget request for the CFTC? ›
The CFTC is requesting a budget of $399.0 million and 725 full-time equivalents (FTE) to operate the agency effectively and support our mission in FY 2025. This request was developed with the “Fiscal Responsibility Act of 2023” in mind.
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The division takes civil enforcement actions against individuals and firms registered with the Commission, those who are engaged in trading derivatives products on designated domestic exchanges, and those who improperly market futures, options, swaps, and commodity contracts, including various digital currencies.
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The CFTC holds wrongdoers accountable by investigating and prosecuting violations of the CEA and Commission regulations.
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The Commission consists of five Commissioners appointed by the President, with the advice and consent of the Senate, to serve staggered five-year terms. The President, with the consent of the Senate, designates one of the Commissioners to serve as Chairman.
What is the CFTC red list? ›
The Registration Deficient List, also called the RED List, contains names of foreign entities that appear to be acting in a capacity that requires registration with the CFTC, but they are NOT registered with the CFTC.
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The mission of the Division of Clearing and Risk (DCR) is to enable the CFTC to meet its statutory responsibility to ensure the financial integrity of all transactions subject to the Commodity Exchange Act (CEA) and the avoidance of systemic risk in the derivatives markets.
Who is subject to the CFTC? ›
As set forth in CFTC Regulation 30.4, any domestic or foreign person engaged in activities like those of a futures commission merchant (FCM), introducing broker (IB), commodity pool operator (CPO), or commodity trading advisor (CTA) must register in the appropriate capacity or seek an exemption from registration under ...
What is the 28 day rule for CFTC? ›
Background on CFTC's Final Interpretive Guidance
The statute contains an exception for contracts of sale that result in “actual delivery” within 28 days from the date of the transaction. This interpretive guidance is not meant to inhibit any particular activity.
Who Must File a Form 40 – Every person who holds or controls a reportable position must file a CFTC Form 40, Statement of Reporting Trader. (See section 18.04 of the regulations under the Commodity Exchange Act.) Persons include individuals, associations, partnerships, corporations, and trusts.
What is the FBI fy23 budget request? ›
FY 2023 Budget Overview
The request includes a total of $10.7 billion for salaries and expenses, which will support 36,945 positions (13,616 special agents, 3,287 intelligence analysts, and 20,042 professional staff), and $61.9 million for construction.
What are the CFTC allegations? ›
In its complaint, the CFTC seeks restitution, disgorgement of ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
What are the violations of the Commodity Exchange Act? ›
Under the CEA, it is unlawful to:
Use any means of fraud or deceit in connection with the sale of commodities or futures contracts involving commodities; or. Manipulate the price of commodities or their futures contracts.
Are SEC enforcement actions civil or criminal? ›
The Division of Enforcement can bring civil suits in federal court and administrative proceedings, seeking remedies such as injunctions, disgorgement of ill-gotten gains, civil fines, and industry bars or suspensions.
Do I have to register with the CFTC? ›
Intermediaries are generally required to register with the CFTC. Associated Persons (APs) also must register and their principals must be listed. Floor Traders (FTs) are also required to register.
What is the purpose of the CFTC? ›
The Commodity Futures Trading Commission (CFTC) protects the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options, and to fosters open, competitive, and financially sound futures and option markets.
Is the CFTC federal? ›
The Commodity Futures Trading Commission, the Federal regulatory agency for futures trading, was established by the Commodity Futures Trading Commission Act of 1974 (7 U.S.C.
What is the difference between the SEC and the CFTC? ›
The SEC and CFTC were created by different laws, have different responsibilities, and use different methods to fulfill those responsibilities. The most basic difference between the two entities is that the SEC regulates the securities market and the CFTC regulates the derivatives market.
