The US Commodity Futures Trading Commission (CFTC) is setting up a fintech Lab that will work with startups to drag the agency into the digital age.
Located in New York, LabCFTC will explore the application of new innovations in fintech and RegTech to guide policy and aid market stability.
The Commission has been lambasted in the past for failing to invest in modern technologies capable of keeping pace with the fast-changing world of financial market trading.
“Simply put, LabCFTC is intended to help us bridge the gap from where we are today to where we need to be: 21st century regulation for today’s digital markets,” says CFTC acting chairman J. Christopher Giancarlo. “The purpose of LabCFTC is twofold: The first is to provide greater regulatory certainly that encourages market-enhancing fintech innovation to improve the quality, resiliency, and competitiveness of our markets. The second is to identify and utilise emerging technologies that can enable the CFTC to carry out its mission more effectively and efficiently in the new digital world.”
Giancarlo references developments in cloud computing, algorithmic trading, AI and distributed ledgers as having the potential for "significant or even transformational impact" on CFTC regulated markets and the agency itself.
The agency has set up a dedicated fintech office for startups to help them understand relevant regulations and the CFTC’s oversight approach.
A second plank in the platform is an initiative dubbed CFTC 2.0, which is intended to foster and help initiate the adoption of new technology within the CFTC’s own activities through collaboration with fintech startups.