CFTC creates new arm dedicated to fintech

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WASHINGTON — The Commodity Futures Trading Commission has launched a new arm dedicated to exploring fintech issues, the agency’s head announced Wednesday.

“The world is changing. Our parents’ financial markets are gone,” J. Christopher Giancarlo, the commision's acting chairman, said in prepared remarks for a speech at the Fintech Innovation Lab in New York. “Yet, despite these 21st-century innovations, the CFTC remains stuck in a 20th-century time warp.”

The agency started a new office in New York, called LabCFTC, to address this lag, Giancarlo said.

“LabCFTC will be the focal point of CFTC fintech policy consideration and development,” he said. “It will be the hub for our engagement with fintech innovators and the community in which they thrive.”

The CFTC’s fintech efforts will be two-pronged, Giancarlo said. First, the agency has established a new webpage called GuidePoint on which companies can interact with the agency to ask about compliance and regulatory matters.

“What we hope to offer is timely, meaningful and useful feedback on the regulatory context of proposed fintech innovations,” Giancarlo said.

In addition, the agency will explore opportunities for integrating financial technologies within its own processes. This could include joint efforts with other agencies, the distribution of CFTC reports using blockchain or even the creation of “regulatory nodes” — a technology that could allow regulators to detect illegal activity on distributed ledgers.

The CFTC’s efforts follow the Office of the Comptroller of the Currency’s creation of an "Office of Innovation" in October that is dedicated to answering similar questions from banks and fintech companies.

It is unclear how far the OCC’s efforts — particularly its plan to grant special-purpose national bank charters to fintech companies — will go under the new administration. Former Comptroller of the Currency Thomas Curry, who spearheaded those initiatives, stepped down earlier this month to be replaced by acting Comptroller Keith Noreika.

The CFTC has a clearer path forward. Giancarlo was appointed to be acting head of the commission in January and is awaiting confirmation to become permanent chairman of the agency.

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