United States Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo believes blockchain technology could be used by regulators to deliver better regulatory responses. In his speech, Giancarlo discussed how blockchain technology could have made the 2008 crisis response much less aggravated.
In 2008, Giancarlo watched the crisis unfold as a senior executive on Wall Street at GFI Group. The company dealt with credit default swaps and was situated right in “the epicenter of systemic risk.”
He believes that it would have made an enormous difference for regulators to have had “access to the real-time trading ledgers of large Wall Street banks, rather than trying to assemble piecemeal data to recreate complex, individual trading portfolios.”
Further, blockchain isn’t the only modern technology that might have been useful in that crisis. “Modern cognitive computing” tech could have been used to identify the anomalies faster.
“In short, what a difference it would have made a decade ago if blockchain technology on a private distributed ledger accessible to regulators had been the informational foundation of Wall Street’s derivatives exposures,” Giancarlo said. “At a minimum, it would certainly have allowed for far faster, better-informed, and more calibrated regulatory intervention instead of the disorganized response that unfortunately ensued.”
Blockchain has a chance of having “a broad and lasting impact” on various aspects of the finance sector, Giancarlo said. It can also contribute to considerable savings. Giancarlo pointed out one study estimated blockchain could lead to financial institutions saving up to $20 billion by 2022 in infrastructure and operational costs yearly.