The last couple of years have seen national governments grappling with how to regulate Bitcoin and other cryptocurrencies. Some of them have been hostile to virtual currencies while others have been more accepting. The United States is no exception to this difficulty, but the Commodity Futures Trading Commission (CFTC) is one federal agency that is actually supportive of Bitcoin and blockchain. This bullish view was reinforced by CFTC Chairman Heath Tarbert when he appeared on CNBC’s “The Exchange” yesterday.
Many government financial officials around the world have been openly hostile towards Bitcoin, but CFTC Chairman Heath Tarbert wants to see the cryptocurrency thrive. He expressed the view that his agency is concerned with the regulation in regards to anti-money laundering and preserving the integrity of the marketplace. The reason for such regulations is to ensure that Bitcoin and other virtual currencies can continue to innovate.
When asked why government officials in Washington freaked out over Libra but not Bitcoin, Tarbert responded that Bitcoin has been around for ten years and is fully understood in how it works. By contrast, Libra is still developing with a lot of unanswered questions about its overall structure.
Tarbert stressed in the interview that Bitcoin is not considered legal tender like the U.S. dollar but is a commodity. As commodities, cryptocurrencies are under the jurisdiction of the CFTC due to the Commodity Exchange Act. Such a view is why Bitcoin futures trading is approved by the CFTC.
He does note that Bitcoin could break out if governments begin accepting BTC as a legitimate payment option. The state of Ohio was the first U.S. state to accept BTC for tax payments, but the state has since discontinued the program.
Keeping the United States in the Lead
During his appearance on CNBC, CFTC Chairman Heath Tarbert stressed that the United States should make a concerted effort to be the world’s leader when it comes to blockchain, the underlying technology for Bitcoin. He says he could see blockchain overtaking the internet, or being parallel with it, in using a variety of different kinds of transactions, including those outside the financial sphere. He added:
“I think whoever ends up leading in this technology will end up writing the rules of the road for the rest of the world. My emphasis is on making sure that the United States is a leader.”
Tarbert has reason for his concern. The governor of the Bank of England, Mark Carney, gave a speech at a gathering of bankers last August where he discussed how a cryptocurrency could impact the current dominance that the U.S. dollar enjoys.
“[A digital currency] could dampen the domineering influence of the U.S. dollar on global trade.”
“The dollar’s influence on global financial conditions could similarly decline if a financial architecture developed around the new [digital currency] and it displaced the dollar’s dominance in credit markets.”
One such digital currency competitor to the dollar could be the one being developed by the People’s Bank of China. It is no secret that China is pushing for blockchain dominance, and Mark Zuckerberg told members of Congress at a recent hearing about the Libra that the United States should not seek to stop the development of Libra and cede the cryptocurrency field to China.