The Commodities Futures Trading Commission (CFTC)announced an initiative to promote responsible financial technology or fintech.
Named LabCFTC, the initiative was announced by CFTC chairman Christopher Giancarlo before the New York Fintech Innovative Lab.
“And that brings me to tonight’s announcement: the launch of the CFTC FinTech initiative,” Giancarlo said. “The launch of what we have titled: “LabCFTC”.
“LabCFTC will be the focal point of CFTC FinTech policy consideration and development. It will be the hub for our engagement with FinTech innovators and the community in which they thrive. It supports President Trump’s call to transform the Federal Government into a modern, digital service provider.
“The purpose of LabCFTC is twofold: The first is to provide greater regulatory certainty that encourages market-enhancing FinTech innovation to improve the quality, resiliency, and competitiveness of our markets. The second is to identify and utilise emerging technologies that can enable the CFTC to carry out its mission more effectively and efficiently in the new digital world.”
There was bi-partisan approval of this initiative as his Democratic colleague, Sharon Bowen, a commissioner on the CFTC applauded the announcement; Giancarlo is a Republican.
“I commend Acting Chairman Giancarlo and the CFTC staff for launching this important initiative. The pace of technological change in financial services is relatively unparalleled in history. In fact, overall financial technology venture capital funding grew 48% since 2011 and lending and payments related categories account for 74% of venture funding since 2006.”
Saying that, “Consumers, farmers, ranchers as well as investors have benefited from the technological innovation of the markets overseen by the CFTC,” the CFTC hopes to the initiative which will be based in New York will leverage fintech and regulation technology or regtech so that the most innovative technology in both industries.
Giancarlo has shown a willingness to support fintech, in February, Bloomberg noted: “J. Christopher Giancarlo has indicated he is more willing to create safe spaces dubbed “regulatory sandboxes” in which fintech companies can experiment with new ideas without fear of being tapped on the shoulder by authorities. The result could radically change the derivative industry’s settlements and recordkeeping processes, industry observers told Bloomberg BNA.”
Nikiforos Mathews, a global co-head of derivatives at the law firm Orrick, Herrington, and Sutcliffe, called his approach more in line with regulators in the UK and Singapore calling it a “first-do-no-harm” approach to early stage fintech.