CFTC Chairman: ‘Distributed Ledger Tech (DLT) Can Automate Regulation’

One chairman at the US Commodity Futures Trading Commission (CFTC) named J. Christopher Giancarlo recently discussed the cryptocurrency news centered around regulation, highlighting the importance of distributed ledger technology (DLT) and its power of automating regulations for derivative markets.

Giancarlo spoke at the DC Fintech Week Conference at Georgetown University this Wednesday and proved that fintech is a rising industry with many new business models for finance. This high-profile financial regulator believes that DLT-powered Quantitiative Regulation, could help regulators to oversee markets in a more efficient way all while saving costs.

As he said, combined with machine learning algorithms, the blockchain-related technology can be employed to identify the segments of markets where high risks of unrecognized counterparty vulnerabilities are rising.

Giancarlo said:

“We can also envision the day where rulebooks are digitized, compliance is increasingly automated or built into business operations through smart contracts, and regulatory reporting is satisfied through real-time DLT networks,. The machines here at the CFTC would have the ability to communicate regulatory requirements and consume and analyze the data that comes in through such systems.”

As he also put, CFTC is looking into an active form of regulation which can respond to real-time challenges that are posed by new technologies. In this manner, he mentioned decentralized markets and disintermediated traditional actors while referring to the challenges.

He also confirmed that the CFTC has “the ability to keep pace with those who attempt to defraud, distort, or manipulate,” and with that hinted that it may have already started building systems that will automate derivative market regulations.

According to Giancarlo, the machine learning and DLT systems could for one digitize rules and regulations and for two – consume, process and analyze data in real time.