Ethereum News Update
Among the power brokers at this week’s DC Blockchain Summit was Brian Quintenz, a commissioner at the Commodity Futures Trading Commission (CFTC), who said there might be “potential” for a self-regulatory body. (Source: “Crypto Industry Should Self Regulate, Says CFTC Commissioner,” CoinDesk, March 8, 2018.)
“I believe that a private cryptocurrency oversight body could bridge the gap between the status quo and future government regulatory action,” he said. [Emphasis added.]
Quintenz stressed that blockchain stakeholders would have to act quickly if they want to front-run action from regulators, because the push for tighter crypto standards is happening everywhere.
From Japan to Europe to Canada, officials are drawing up actual legislation to rein in cryptocurrency excesses. Some are even working with the International Monetary Fund (IMF) to create a global standard.
In his keynote address, Quintenz argued that the blockchain community should help write the ending to this story:
“If the community takes advantage of that time and that ambiguity there’s the potential for a global framework to apply to everyone if there’s enough buy-in from the community to do that, since there aren’t jurisdictional questions as to which entity has to do what, or rules that necessitate a bifurcation or separate approaches to the regulation.”
While his comments did not move cryptocurrencies higher, I think they are important nonetheless. Quintenz is a high ranking official in one of the world’s most important regulatory bodies—his words come attached with no small degree of power.
What he’s done is signal the CFTC’s openness to a self-regulatory body. Moreover, he’s given a rough roadmap of how to get there, indicating that distinctions would have to be made between cryptos that function as commodities and those that look more like securities.
Lines need to be drawn, for the sake of clarity, and to avoid turf wars between government agencies.
A self-regulatory body might balance the rule of law with the need for innovation better than a government agency, but it still needs widespread support from the cryptocurrency community.
It’s clear the CFTC won’t stand pushback against an effort to self-regulate, so now it’s on us to come with those solutions. I personally think it’s in everyone’s best interests, especially for investors. Just look at what chaos and uncertainty has wreaked upon Ethereum prices.
ETH prices are down 6.23% against the U.S. dollar, bringing the Ethereum to USD exchange rate to $703.29. One way to reverse this crash is to establish a self-regulatory organization with clear rules and standards. That way, blockchain developers can spend time on real development.
From where I’m standing, it looks like much of this confusion will begin to dissipate in the second quarter of 2018, leading to a resurgence of optimism among ETH traders. This could lead to a massive rally, similar to the one last year, with the net result of ETH reaching our $1,500 Ethereum price forecast for Q2.