The U.S. Commodity Futures Trading Commission (CFTC), through its LabCFTC initiative, has published an inquiry towards the end of December 2018 and sought public comments on fintech innovations, and now the results are in from a number of prominent industry figures.
Gain Better Understanding of Ethereum Network
According to an official communication from CFTC, over 30 leading cryptocurrency and financial institutions have so far filed responses to the December 12, 2018, request on crypto-asset mechanics. The watchdog had placed a public appeal for information with the primary objective being seeking an understanding of the Ethereum Network.
The information sought included the similarities and differences between different digital currencies including the “technology, mechanics, and markets for virtual currencies beyond Bitcoin.” As per the request, the public’s response would help the commission advance its mission of maintaining the reliability of the derivative markets besides keeping an eye with the aim of decreasing systemic risks by promoting legal certainty in the field.
The commission stated:
“The RFI seeks to understand similarities and distinctions between certain virtual currencies, including Ether and Bitcoin, as well as Ether-specific opportunities, challenges, and risks.”
A Bright Future for Asset-Backed Cryptocurrencies
The deadline for submitting responses was set for February 15, 2018, but forms have continued to provide information at least until February 25, 2019, with over 35 institutions responding. Among the leading crypto firms to return were blockchain consortium R3, Coinbase, the Ethereum Foundation, Weiss Ratings, Circle crypto finance company, blockchain tech experts ConsenSys and ErisX to name a few.
Apart from applauding CFTC for their initiative, R3 Director Charlie Cooper gave a bird’s eye view of where he believes cryptocurrencies are headed in 2019. He reiterated his belief that asset-backed cryptocurrencies like the ones pegged to real estate or gold as well as native tokens most likely held the future of the crypto industry.
On his side, Circle Chief Legal Officer Gus P, Coldebella praised the Ethereum network, which supports several cryptocurrencies saying it could contribute to the global tokenization of value. According to Gus, just like the internet has made information transfer easier and accessible, tokenization will make assets more available online and internationally.
Coinbase Chief Legal Officer Brian Brooks addressed the issue of regulations and risks surrounding the Ethereum network. However, he said Coinbase believes that the CFTC’s desire to oversee the Ethereum derivative market could be undermined by the fact that a considerable amount of the trade happens beyond the commission’s jurisdiction.
The initiative by CFTC comes at a time when there are concerns that SEC, by applying archaic rules “to protect investors” is killing innovation since overprotection seems to be doing more harm than good. However, there is a consensus that while SEC’s approach to cryptocurrencies is legitimate, the U.S can still find a way of regulating the crypto market without killing innovation.