The chairman of the Commodity Futures Trading Commission (CFTC), Dr. Heath P. Tarbert, anticipates Bitcoin futures trading to increase and wants to see the US at the forefront of blockchain technology innovations in finance.
In an interview with Anthony Pompliano during the virtual LA Blockchain Summit, Tarbert explains that once cryptocurrencies and digital assets see more real world use, BTC will see more action in the futures market.
“I do expect the volumes to grow in the years ahead. But the other aspect of it has to do with the industry itself… Really our derivatives markets serves two purposes. First, they allow hedging, and then they also create price discovery where people can rely in some cases on derivatives prices to inform their decisions in the actual underlying markets. Right now there’s a real question as to who will actually purchase Ether or Bitcoin contracts for purposes of hedging. Right now the only people we’re seeing in these markets are speculators meaning they don’t actually have an underlying risk they’re trying to lay off…
That could all change to the extent that we start to see Bitcoin, Ether and other digital currencies being used for commerce. I think that’s going to be the key. It’s going to be the length of time, but also the extent to which digital assets and cryptocurrencies begin being used by the real economy and there’s people that say ‘I need to go to the futures market to hedge it.’”
As to whether central bank digital currencies (CBDCs) are going to be the standard around the world, the CFTC head says his colleagues at the Federal Reserve are in a better position to provide insights on the issue. But, Tarbert highlights it is imperative that the United States perform a leading role in shaping the blockchain space before other countries dominate the scene.
“I want to see the United States lead in blockchain technology. For me, it’s not necessarily something that the government needs to be involved with directly, but there could be benefits to that as well. But I really want to see the United States continue to support innovation in this space, because I do see other countries coming in and starting to potentially take the lead and I think it’s really important that a democracy such as ours continues to be at the forefront of this for the future of the global financial system.”
Tarbert also says that in order to prepare the CFTC for the future of finance, the agency has been hiring people with a background in cryptocurrency.
“I’ve tried to hire people that come from the tech community. So our new head of lab CFTC, she came from a Silicon Valley-based company. One person in our office as well as one of our division directors came from a cryptocurrency exchange. Finally, we just hired one of the few PhD Ivy League economists in the world with a background in crypto. So its really important that we have those people in the agency.”
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