We spoke with the former CFTC chief about digitizing the dollar and how the private sector will be key to adoption

J. Christopher Giancarlo, the former Chair of the Commodity Futures Trading Commission (CFTC) and so-called “Crypto Dad” Christopher Giancarlo announced plans for a formal exploration of a United States central bank digital currency (CBDC) this morning.

Giancarlo has long been an advocate for the exploration of a digital dollar, but now he’s taking things further with the creation of the Digital Dollar Project. The Block caught up with Giancarlo in the wake of the announcement for an exclusive interview.

Giancarlo spent 35 years in U.S. financial markets, and now, after leaving the CFTC and joining a variety of boards, he plans to spend the coming years working to push financial infrastructure forward.

“I reflected what I want to focus on in the remainder of my public life,” he said during the interview. “My observation is that just as we have sadly allowed our physical infrastructure to age and decay over the last generation or so – physical infrastructure that was largely built in the mid 20th century – so too, we’ve also allowed our financial infrastructure to age and decay, and it needs to be updated for a new digital era.”

Road to a digital dollar

Giancarlo is shaping the dialogue for how to update such infrastructure from a variety of vantage points, including from the board of the American Financial Exchange, a marketplace for bank to bank lending, and most recently from a seat with the Common Securitization Solutions as an independent, non-executive chairman.

In both cases, he said he’s interested in modernizing the financial system.

These ventures are part of a broader vocation of modernizing the U.S. dollar, according to Giancarlo, with the Digital Dollar Project following in like with that experience. As CFTC chairman, the possibility of a digital dollar wasn’t under his jurisdiction – but the growth of cryptocurrencies spurred his interest all the same.

While he said he doesn’t see the dollar as threatened, Giancarlo believes it’s in America's best interest to modernize an analog currency, particularly as other nations explore the prospect.

To be clear, this exploration comes from the private sector. While a statement from the project acknowledges that there would inevitably have to be involvement from the U.S. Federal Reserve, for now, the project remains a hub of experts and ideas without formal ties to the public sector.  

“What we’re proposing with the digital dollar project is really to marshal resources of the private sector,” he said.

By bringing together experts from a variety of fields, Giancarlo said the project aims to do the “intellectual heavy lifting” of discovering and resolving the key issues that surround the launch of a digital dollar. 

“As in when the public sector wishes to draw upon that work product, it will be available to them and our processes will be open to them,” he said. 

Who's who 

From the outset, Giancarlo has joined forces with his brother, Charles Giancarlo, CEO of Pure Storage; Daniel Gorfine, CEO of Gattaca Horizons and former Chief Innovation Officer of the CFTC and Director of LabCFTC.

The three finance veterans have partnered with Accenture, the consulting company which Sweden's central bank selected to help it develop a testbed for a digital currency. 

Giancarlo said the group mostly came together out of prior acquaintance and familiarity, although Accenture’s previous work was compelling as well. With the help of Accenture, they won’t be drawing up a digital dollar from scratch.

“There will be many, many aspects of a digital dollar that are unique to the dollar, but there will also be many other aspects that are common to other central digital currencies, and not every wheel needs to be reinvented anew,” he said. “So the benefits that Accenture brings is that they have looked at, considered and come up with many solutions that will be part of a digital dollar.” 

Work to be done

Because of the early stage of the project, technical questions such as which technology the currency will be built have yet to be solidified. The Digital Dollar Project is currently focused on gathering information and being what Giancarlo called a “thought leader” on the topic.

While the role of the project could change at a later stage, Giancarlo said he doesn’t foresee the organization being heavily involved with the coding of the digital dollar or having a major role in its governance. 

Ultimately, he said that it’s a journey with many steps, and these are the early days, leaving much of the tangibles to time.

On Thursday, the group launched a website with materials distinguishing what the project is and isn’t. Prior to the announcement, inaccurate rumors made their way across Twitter that the Federal Reserve could be in development talks. The materials further delineate the group's vision and separate it as a private venture. 

As for concrete steps, Giancarlo said the next step is developing a white paper proposing core elements and the value proposition of a digital dollar.

From there, he said the group will likely engage in a number of public and private conversations bringing in people of a variety of disciplines, including those with central bank experience, national security backgrounds, and anti-money laundering expertise.