Libertarians generally don't expect much of government regulators. Hearings on the hill about how to approach some new, unregulated activity often boil down to little more than nebulous demands to "do something" and boss people like us around. This is especially pronounced with a revolutionary new technology like bitcoin. For these reasons, a recent testimony by the chairmen of the Commodity Futures Trading Commission (CFTC) and Securities Exchange Commission (SEC) before the Senate Banking Committee provided a welcome breath of fresh air to the cryptocurrency community. Rather than rushing to regulate, these policymakers urged restraint and humility towards financial innovation.
Last week, the cryptocurrency community breathed a collective sigh of relief as two of the most relevant financial regulatory bodies in the United States signaled an unusual understanding of blockchain technologies and explicitly committed to a "do no harm" approach towards cryptocurrencies. In his remarks before the committee, CFTC Chairman J. Christopher Giancarlo told the body that "we owe it to this generation to respect their enthusiasm about virtual currencies with a thoughtful and balanced response, not a dismissive one." SEC Chairman Jay Clayton, while more skeptical about certain cryptocurrency applications and fundraising vehicles, nonetheless praised the technology's promise to "facilitate capital formation [and provide] promising investment opportunities." Both men outlined a regulatory path forward that, while still imperfect (as most things are), would be much preferable to many alternatives. Andrea O'Sullivan explains more.