CFTC Chairman Wants US to Lead in Blockchain Technology and Says Fintech Regulation Needs Principles Not Proscriptive Rules

In an appearance on CNBC last week, Heath Tarbert, chairman of the Commodity Futures Trading Commission indicated that he wanted the United States to “lead” in the blockchain technology underlying cryptoassets. Currently, said Dr. Tarbert, “I don’t think we’re at the top of the list [and] we may not be at the bottom.” He noted, however, that, when the Libra Association chose a location to set up, they “could have chosen anywhere in the world.” They picked Switzerland, with Singapore being their second choice. “I don’t know where the United States was,” said Dr. Tarbert, “but it clearly wasn’t first on the list.” According to Dr. Tarbert, whoever leads in blockchain technology will get to establish “the rules of the road for the rest of the world” and he is committed to seeing the United States as “a leader.”

Separately, in an opinion article in Fortune, Dr. Tarbert indicated that a “principles-based approach” is the best way to regulate cryptoassets and other fintech products. He noted that such an approach has been applied by the CFTC in evaluating clearinghouses that settle transactions that might result in the delivery of bitcoin. Although cryptoassets “face the unique operational risk of a systems hack that could result in a loss or theft,” Dr. Tarbert said the CFTC’s core principles solely require clearinghouses to identify and minimize operational risk without prescribing precisely how. As a result, each of the three clearinghouses currently processing cryptoassets were “able to adopt a different method of facilitating Bitcoin transfers and addressing the risk of loss.”

Dr. Tarbert argued that principles-based regulation “can provide a more effective regulatory approach for overseeing financial services in this global technological age than a highly prescriptive rules-based approach can.”

In other legal and regulatory developments involving cryptoassets:

  • Singapore Regulator Seeks Input to Authorize…

Source Link