J. Christopher, the current chairperson of U.S Commodity Futures Trading Commission has said that one of the main reasons why the internet thrived is because the government did not impose too stringent measures to control it. While speaking to CNBC in an interview, the chairperson said that there is need for a “do no harm approaches” approach when creating policies to control cryptocurrency in the United States and other parts of the world.
No Need to Inhibit Innovation
When creating policies to oversight cryptocurrencies, the regulator said that the government needs to be careful not to come up with measures that will inhibit future innovations. He also went ahead to state that the team should be cautious during the policy creation process to avoid manipulation.
As mentioned earlier, Christopher repeated the phrase that the internet only flourished because there was not much government interference. He is confident that such as approach could greater help the cryptocurrency industry to also flourish despite the various challenges that faces it on a daily basis.
The do harm approach means that the government should first appreciate the fact that cryptocurrencies cannot affect the economy negatively. With this in mind, they can come up with policies that are holistic and in line with the current market trends and interests of the industry leaders. Note that there are companies that have invested millions of dollars in this technology, and one wrong policy could result in a massive loss that could affect the economy at large negatively.
The chairperson also said that there is need for caution to avoid some form of manipulation and fraud that could flush down all the gains achieved by cryptocurrency markets. When asked about the specific risks associated with fraud, Christopher stated that during the policy making stages, slow and strategic steps should be taken to ensure that all the loopholes in the system are sealed.
Mandate of CFTC
CFTC is the main government body that is tasked to regulate cryptocurrency development and trading in the United States. It is also involved in monitoring of derivative markets as well as futures. Back in 2015, the organization stated that virtual currencies are indeed commodities that need to be regulated.
Securities and Exchange Commission and CFTC have warned the public about the fraud risks associated with virtual currency markets. When asked about the assumption that the government was taking too long to come up with robust policies for regulating cryptocurrencies, he said that it’s not the case. He used bitcoin futures being legalized in the U.S is a clear indication that the government is keen on evaluating the industry.
The “do no harm approach” recommended by CFTC will greatly help creation of policies that are in line with the market trends. The needs and expectations of all the leaders will be put into consideration during the policy creation process and this will greatly help to ensure that we have policies that no not affect any section of the industry negatively.