Blog: Former CFTC Chair Calls for Dedicated US Crypto Regulator – Regulation Asia

Such a bureau would have its own authorisation and financing, and adopt the mandates of both the CFTC and SEC, said J. Christopher Giancarlo.

Former CFTC (Commodity Futures Trading Commission) chairman J. Christopher Giancarlo has called for the creation of a separate agency to oversee crypto-related activities in the US.

Speaking on a panel during an American Enterprise Institute web event, Giancarlo suggested that a dedicated crypto bureau could be formed from an ad-hoc working group that he helped to create with former US SEC (Securities and Exchange Commission) chairman Jay Clayton.

“Take the ad-hoc cryptocurrency working group that I and Jay Clayton created between the CFTC and SEC and develop it into a bureau, a crypto bureau, which would have joint parentage of the SEC and the CFTC,” Giancarlo said. “But it would have its own authorisation, its own financing … it would have both a commission structure formed from the two agencies but then a head who would be independently nominated by the president, confirmed by the senate, that would be the crypto czar, the crypto leader of a crypto agency.”

According to Giancarlo, such a bureau would be able to integrate the CFTC’s mandate for innovation, deep and competitive liquid markets, and anti-fraud manipulation; while at the same time adopting the SEC’s mandate for consumer protection, disclosure and registration. “Take these two mandates, combine it in one bureau and give that bureau oversight over crypto,” he said, adding that there could also be a role for other agencies such as the CFPB (Consumer Financial Protection Bureau).

“There’s a lot of politics involved but at the end of the day you can’t have multiple regulators,” Giancarlo said. “You need one regulator that’s crypto focused and has crypto expertise, and we absolutely need self-regulation alongside federal regulation.”

In October, crypto exchange Coinbase published its vision for a single federal regulator assigned with responsibility for digital asset markets. Its authority would include a new registration process for marketplaces for digital assets, and the establishment of a new disclosure regime to ensure investors are informed.

Responding to the industry proposal, Giancarlo said: “They’re absolutely right that there should be a single regulator. At the end of the day, you can’t have multiple regulators.”

Giancarlo’s comments come as the SEC and CFTC jostle for their respective claims over jurisdiction in crypto markets. “That battle’s not going away. The SEC’s not going to run from this. The CFTC is not going to yield,” he said.

He also said a CBDC should exist alongside non-sovereign digital currencies because the best protection against government surveillance could be competition from other stablecoins.

In January 2020, Giancarlo became a key founding member of the Digital Dollar Foundation, a non-profit partnership formed with Accenture and others to explore the creation of a digital dollar. In May 2021, plans to launch at least five pilot tests were unveiled.

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