U.S. CFTC Chairman Says Growing Interest in Crypto Could Trigger Applications For More Clearinghouses


Increased interest in cryptocurrencies could lead to a surge in the number of firms applying for clearinghouses licenses, says the chairman of the United States Commodity Futures Trading Commission (CFTC).

According to CFTC chair Christopher Giancarlo, there is an “explosion in interest” in digital assets from the investor community and this could potentially be the trigger for more applications in a sector where security is still one of the major risks.

Giancarlo made his remarks in a speech given during a House committee meeting, according to a press release the regulator published on May 1.

He told the subcommittee members that his Commission expected to see “new applications for clearinghouse registration,” as a result of the growing interest. He added that the anticipation was informed by the fact that the crypto sector is an area where protection of the digital assets is top of the risk agenda.

The CFTC chairman was speaking to the House of Representatives Committee on Agriculture Subcommittee on Commodity Exchanges, Energy and Credit in Washington, D.C.

Clearinghouses operate as financial intermediaries, offering something like a transactional oversight on a financial transaction between two entities.

The institution’s main goal is to ensure that the process is frictionless and that both the buyer and seller adhere to and follow the terms of the financial agreement.

In his comments, Giancarlo noted that the Commission would be conducting additional examinations with regard to how these clearinghouses operate. The main objective is for the regulators to identify those issues that could impinge on the work put in to control related risks.

Another area of emphasis is in the agency’s plans on how to monitor and regulate technological developments, which includes developments within the blockchain and crypto industry. In this, Giancarlo noted, CFTC subscribes to four key pillars in its mandate.

First, there is a need for the agency to adopt an “exponential growth mindset,” in relation to the developments in the sector. Then it takes a “quantitative” regulatory approach that means the commission has to embrace “market-based solutions.”

The other cornerstone is its internal Fintech Stakeholder initiative that is designed to help identify opportunities as well as tackle associated challenges.

The fact that CFTC wants to see the crypto sector develop perhaps came out clearly from Giancarlo’s comments earlier last month. According to him, the regulator’s commitment is towards enhancing its monitoring capacity, but it won’t be interfering with developments within the cryptocurrency sector.

He reiterated that the agency will not be pressured into suppressing growth within the digital currency space. He noted at the time that the goal is to simplify the agency’s rules and regulations, to infuse straightforwardness and cut costs likely passed to market participants.

The CFTC chair has in the past also talked of blockchain and crypto as two sectors that are set to greatly transform current markets.

Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.

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