CFTC Chairman Says ‘Explosion of Interest’ In Cryptocurrencies Will Attract Clearinghouses

Chairperson of the United Stated Commodity Futures Trading Commission (CFTC), Christopher Giancarlo, recently stated that the ‘explosion of interest’ in digital currencies is likely to bring more clearinghouses closer to the crypto industry.

Clearinghouses are basically financial institutions that act as intermediaries between the two parties to clear transactions. The clearinghouses ensure that trust is maintained at all ends during a transaction.

The CFTC regulates and routinely monitors these entities in order to control risks, said the CFTC chairman during his opening remarks before the U.S. House Agriculture Committee on Wednesday, May 1.

He also referred to clearinghouses as “critical single points of risk in the global financial system” that continue to become more complex. Giancarlo stressed that the number of clearinghouses will continue to grow along with the introduction of new crypto futures.

He said: “The Commission anticipates new applications for clearinghouse registration resulting from the explosion of interest in cryptocurrencies; an area in which protection of the cryptocurrencies will be one of the highest risks.”

During his speech, Giancarlo also addressed the regulator’s fintech research group LabCFTC created to keep up with the developments in technology. He also referred to cryptocurrencies and blockchain as two aspects of the “rapidly changing markets and technological developments.”

Giancarlo passed the research group for their persistent efforts to keep CFTC appraised of the new developments and help with the regulatory response when required.

He noted that the CFTC has been so far successful in analyzing market data “without being reliant on self-regulatory organizations and market intermediaries”.

Over the last two year, CFTC has been quite instrumental in bringing crypto markets products especially Bitcoin Futures to the market. The agency under the leadership of chairman Giancarlo has been open to the idea of digital currencies without maintaining much hostility towards the crypto market, unlike other traditional agencies.

At the same time it has also assured the regulatory balance remains in place while protecting investors’ interests.