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CFTC Commissioner Rostin Behnam Discusses Challenges of the FinTech Industry
The 2018 ISDA Annual Japan Conference was held on Friday October 26 in the Shangri-La Hotel in Tokyo. This year’s topics included the next steps to benchmark reform, and the ever impending Brexit, among other things, but what we’re interested in is Commissioner Rostin Behnam’s remarks on FinTech and cryptocurrency.
Benham gave a relatively long but engaging speech that focused on what he considers significant hurdles in our markets.
Key Remarks
The remarks below by Commissioner Rostin Behnam have been paraphrased so that the key points of his speech are put across succinctly.
- Innovators want access to financial networks, and they are excited about bringing the next big thing to the market, but when it comes to the risks often there isn’t enough consideration.
- We are in a time of uncertainty when it comes to rules and regulations and how they fit into emerging, new and innovative technology.
- The CTFC wants to make sure that risks and legal issues with new financial technologies are thought through so that there is a safety net in place and damage is mitigated (should there be any).
- The CFTC wants there to be an open dialogue with innovators so that innovators and regulators can work together to solve these issues.
- While FinTech innovation is shaping the global economy in a positive way, the move to digitalization across the finance industry is still a major challenge, and one likely to be talked about at the G20 summit which Japan is hosting this year.
Out of the key remarks, the significant theme underlying all of them is the need for collaboration between innovators and regulators. With such fast advancements in financial technology, the rules and regulations are having a hard time catching up and adapting the rules to make sense for a modern and digital world. Essentially innovators are paving the way into unexplored territory here, and the financial regulators are rightfully cautious since the protection of the market and the people affected by changes in the market lies with them.
The CTFC do seem to recognize that the only way they can make progress in this area is to have an open dialogue with innovators so there are no surprises along the way, and it seems they are encouraging collaboration whenever they can and will continue to do so as we progress through these exciting times.
