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Crypto Weekly

Biden's 'reactionary' approach to crypto regulation blasted by former CFTC chairman

Giancarlo calls for the creation of a Crypto Bureau joint with the SEC/CFTC

Blockchain believers have called the rise of Bitcoin BTCUSD, -0.31% and other cryptocurrencies a revolution, implicitly placing bankers and federal regulators in the role of anxious reactionaries.

CFTC Chairman Chris Giancarlo termed the Biden administration's approach to crypto "highly defensive and reactionary" on Tuesday. A recent Biden administration report on stablecoin regulation revealed a concern for "what could go wrong" rather than "what could go right," while failing to "declare any national imperative to harness digitalasset innovation to extend inclusivity and lower costs for new generations of Americans."

In 2019, Giancarlo, who was appointed by the Obama administration as a Republican commissioner at the CFTC and then elevated to the position of chairman by President Trump, launched the Digital Dollar Project after leaving public service to promote the creation of a central bank-backed digital currency.

According to him, "taking advantage of this wave of innovation will lead to greater financial inclusion, capital efficiency, and economic growth for generations to come. The coming wave of the internet will expose the weaknesses of our outdated analog financial systems, potentially disrupting western economies if we do not act."

Giancarlo supported recent efforts by the Federal Reserve Bank of Boston to create open-source code that could help the development of a digital dollar in collaboration with the Massachusetts Institute of Technology. The Fed has promised to issue a report on the benefits and risks of issuing central bank digital currencies. Although Chairman Powell promised that it would be released "soon," it remains unfinished. Moreover, the former regulator believes Congress must act to streamline regulation of private cryptocurrencies by creating a new bureau jointly run by the Securities and Exchange Commission and the Commodity Futures Trading Commission.

During his remarks Tuesday, he argued Congress should transform the cryptocurrency working group he created with then SEC chairman Jay Clayton into a "crypto bureau that would be under joint authority of both the SEC and the CFTC but with its own authority and funding."

Giancarlo argued that this approach would take into account the fact that neither the Senate Agriculture Committee, which oversees the CFTC, nor the Senate Banking Committee, which oversees the SEC, will vote to give up their power to regulate the emerging crypto sector. 