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CFTC Chairman calls Bitcoin [BTC] a ‘Virtual Asset’ and unfit to be a medium of exchange

J. Christopher ‘Chris’ Giancarlo was interviewed by the CNBC Fast Money network where he gave the viewers his perspective view on Bitcoin’s nature. He presented the view of US Commodity Futures Trading Commission [CFTC] on Bitcoin.

He starts by explaining how the CFTC’s statutes were written in 1935 and are really old to fit in some new, innovative concept like Bitcoin which makes it hard to categorize. In the case of CFTC, they have seen how the licensing of Bitcoin’s futures contracts which are cash-settled contracts on Bitcoin operated by two large exchanges, the Chicago Markets of Exchange [CME] and Chicago Board Options Exchange [CBOE] which are working quite well.

He says:“Bitcoin and a lot of its other virtual currency counterparts really have elements of all of the different asset classes, whether they’re meeting payment, whether it’s a long-term asset. We see elements of commodities in [bitcoin] that are subject to our regulations, but depending on which regulatory regime you’re looking at, it has different aspects of all of that.”

He was unanimously confirmed as Chairman of the U.S. Commodity Futures Trading Commission by the U.S. Senate on August 3rd, 2017. He currently serves in the same position. He was the Executive Vice President of GFI Group Inc., a financial services firm before entering public service.

In the past, Chris Giancarlo had stated that Bitcoin in many ways acts like a commodity in the context of gold to which he reaffirms and calls Bitcoin a ‘Virtual Asset’ which many find worthy of holding for a long period of time and has aspects that might not be ideal as a medium of exchange but is more suitable for a buy and hold strategy like gold

 After the categorizing the Bitcoin as a virtual asset, Chris in a very fumbling change of words states that the truth is  Bitcoin and its other counterparts, i.e. other cryptocurrencies hold elements of all of the different asset classes which include being a medium of payment, a long-term asset.As the world and its regulators are pacing themselves to hold a grip on the new innovative technology without much understanding, according to him, it is complicating the things even more and Chris personally does not see it resolving anytime soon.

The Chairman of CFTC further talks about how CFTC’s core principles promote technological advancement and they utilize the statutes in the best way to fit in the technologies that arrive in the market. He then, dodging the question whether SEC, CFTC, and other regulators are taking a zealous approach in regulating the Bitcoin and other cryptocurrencies in the market, was seen pinning it on the Congress as in his words:

“Congress is the one that makes policies and it’s their decision in the end.”

He admits to the fact that Bitcoin and the technology is relatively new and it would take more understanding from the regulatory bodies and more open-minded people to make an approach regarding the cryptocurrencies which has opened up a bunch of possibilities.

Chris and John Clayton, the SEC Chairman also put forward their concern in front of the Congress and expects this or the next Congress to legislate new laws concerning cryptocurrencies. As the current Congress is divided among congressmen who believe that the technology and the asset class will take its natural course and others who believe to make concrete changes.

Christopher Giancarlo discusses the 100 pages data that was released by CFTC which Chris and the Chief Economist of the CFTC together prepared evaluating the regulations and other actions that the CFTC has taken in the last four years to prepare a more advanced, efficient ‘Swap 2.0’ which would reward the investors and the economy equally.

 

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