Parting is such sweet sorrow, especially when it happens to be someone in the regulatory establishment that has been a stalwart supporter of the crypto revolution and blockchain technology. J. Christopher Giancarlo, Chairman of the U.S. Commodity Futures Trading Commission (CFTC) and affectionately known as ‘Crypto Dad’, will soon be stepping down from his post after having served out a five-year term in office. He is expecting an “explosion of interest in cryptocurrencies” and considers these disruptive technologies as comparable to the Renaissance period in European history.
Giancarlo, unlike many of his regulatory “brothers”, has embraced the new digital age and the prominent technologies within it and has abhorred the fear that others of his kind have expressed from time to time. The CFTC under Giancarlo has taken a more accommodative stance on cryptos, when the need for specialized tools was evident. The derivatives and futures market was in need of crypto hedging instruments, and the agency did not hesitate to address the need and approve the launch of Bitcoin futures contracts at the Chicago Board Options Exchange (CBOE) and the CME Group in December 2017. Many pundits have suggested that this move was the first step to opening the door for institutional participation in the crypto space.
While the SEC withholds its approval for a Bitcoin ETF, presumably on the grounds that the market is too thin and too susceptible to price manipulation, the CFTC has developed a reputation for being more crypto-friendly. Per Giancarlo:
It has been a core belief during my tenure as Chairman that in order for the CFTC to remain an effective regulator, it must keep pace with these changes, or our regulations will become outdated and ineffective. I am pleased to say that over the last two years, the CFTC has been no bystander to the digitization of modern markets.
Giancarlo’s point all along is that technologies can be transformative for society, but if too many restraints are put upon the creative spirit too early on in the process, then the benefits may not be forthcoming. The market must be allowed to do its work to determine if any new technology or products and services have merit in the world’s marketplace. From his viewpoint, the market is much more competent in making these types of decisions than mere mortals are.
His perspective has always been refreshing: “Just as our lives are being transformed, so the world’s trading markets are going through the same digital revolution from analog to digital, from human to algorithmic trading and from stand-alone centers to interconnected trading webs. Emerging digital technologies are impacting trading markets and the entire financial landscape with far-ranging implications for capital formation and risk transfer.”
The crypto industry will be losing a dear friend, when Giancarlo exits the scene. His open mindedness has been a necessary ingredient that has countered many a critical opinion, as the crypto industry established itself and has gradually turned the tide of opinion in its favor. He will be missed, and we can only wish that his successor is of like mind and capable of making these final remarks:
I feel fortunate to have been at the helm during this time to be a voice in government to quiet some of the fears and calls to dismiss or squash this new technology.