Former CFTC Chair: Regulatory clarity for digital assets is even more urgent for banks

U.S. banks need regulatory clarity on digital assets (cryptocurrencies) to avoid falling behind in the global race for payment innovation, according to a growing view.

Cointelegraph reported on the 8th (local time) that Christopher Giancarlo, former chair of the U.S. Commodity Futures Trading Commission (CFTC), said in a recent appearance on Scott Melker’s podcast “The Wolf of All Streets” that “regulatory uncertainty is the biggest obstacle preventing banks from investing in digital-asset technology.”

Giancarlo stressed that “banks’ legal teams are advising boards that without regulatory certainty, they cannot make investments worth billions of dollars. The side that most needs this technology is not actually the digital-asset industry, but the banks.”

He said the digital-asset industry will continue to develop regardless of the regulatory environment. By contrast, he explained, banks find it difficult to pursue proactive adoption because of regulatory risk.

In the U.S. Congress, the “CLARITY Act.”, a digital-asset market structure bill, is under discussion, but progress in the Senate has been slow. That is because differences persist among banks, digital-asset firms and politicians over key issues, including whether to allow stablecoin yield offerings.

Giancarlo warned that if U.S. banks delay adopting digital assets, financial institutions in Asia and Europe could move first to capture the market. “Digital financial infrastructure will ultimately be built,” he said, adding that “if U.S. banks respond late, they could fall behind in the global financial system.”

He also predicted that even if the bill does not pass, regulators could establish rules on their own. “If the bill does not pass, the Securities and Exchange Commission (SEC) and the CFTC will create a regulatory framework,” he said, while noting that “it may be less stable than regulation grounded in statute.”

He added, “The digital-asset industry has already continued to grow even under a strict regulatory environment. If anything, the side that needs clear rules is the banking sector.”