Even the U.S. CFTC chairman Christopher Giancarlo stated that market regulators need to maintain pace with technological innovations.
The U.S. Commodity Futures Trading Commission (CFTC) Chairman Christopher Giancarlo said in a speech Nov. 7, which technological improvements, such as Distributed Ledger Technology (DLT), might help regulators better oversee trading markets.Giancarlo delivered his speech titled “Quantitative Regulation: Effective Market Regulation in a Digital Era” in the FinTech Week conference at Georgetown University Law School. The chairman addressed emerging electronic technologies, such as DLT, big data, automatic data analysis, and artificial intelligence (AI), and their impact on trading markets and the fiscal landscape.In terms of implementing such technologies into trading markets, Giancarlo explained that “we now begin to find a world where the majority of regular jobs are handled by machines” since, combined using DLT, automation eases cost reduction and improves commerce matching, processing, clearing and settlement.Giancarlo suggested that higher-order computing technologies will likely turn into “ubiquitous” into financial and commodity derivatives markets. He said that the CFTC and other authorities might have to keep up with the progress of AI to be able to succeed.Giancarlo further pointed out that the commission has to be proactive in regulatory information collection, automatic analysis, and data policy application, and finally develop into a “quantitative regulator. ”Speaking on the challenges presented by data automation and machinery and their impact on labor markets, Giancarlo argued “becoming a quantitative regulator doesn’t mean replacing human judgment and promote intelligence; it signifies reinforcing it:”“This implies freeing agency staff from repetitive and very low value jobs to concentrate on high value activities that require their pro judgment and domain awareness. This means marshalling quality information that is efficiently and, maybe, algorithmically examined upon which individual judgement can be deployed, unfurled and expanded. ”The chairman indicated that DLT would help regulators analyze data, real-world results, and success in fulfilling regulatory objectives, “instead of rely on static rules and regulations which were put in place without knowing the consequences or outcomes they would drive in the market. ” He added:“We can also picture the day by which rulebooks are digitized, funding is automatic or constructed into business operations through contracts that are smart, and regulatory coverage is satisfied through real-time DLT networks. ”In July, Giancarlo summarized his agency’s curiosity about blockchain technology, emphasizing the requirement for the appropriate procedures that would allow the CFTC to examine innovative blockchain technician for possible future use cases. The chairman said there is a need for a process of sharing information between the agency and fintech innovators, “especially in the area of blockchain. &rdquo […]