President of CFTC: bitcoin has characteristics of all types of financial assets

On Monday, April 30, the head of the Commission on Trade in Futures on Merchandise of the United States (CFTC), J. Christopher Giancarlo, declared on the "Fast Money" program of the CNBC news network that Bitcoin has its own characteristics of different types of assets.

According to Giancarlo, the bitcoin has a multifaceted character because it can be used as a means of payment, as a long - term asset and has elements of a commodity (merchandise).

Bitcoin and many of its other cryptocurrency counterparts actually have elements of all different asset classes, whether they meet as a means of payment, or are a long-term asset We see commodity elements in it (bitcoin) that are subject to to our regulations but depending on the regulatory regime that is being analyzed, it has different aspects of all that.

J. Christopher Giancarlo

President, CFTC

Giancarlo came to buy bitcoin with gold, saying that this cryptocurrency has similar aspects to precious metal, only that bitcoin "is virtual, it is digital". On the other hand, Giancarlo argued that bitcoin may not be an ideal means of payment, and that it is better as an asset to buy and retain in the long term.

Regarding the regulatory framework for cryptocurrencies, Giancarlo explained that the CFTC operates with guidelines that were established in 1930, and that since bitcoin is a fairly novel asset, it is the work of the American Congress, and not the CFTC, to decide whether they should be develop and implement new regulatory policies for this new type of assets.

Due to the multifaceted nature of cryptocurrencies, their regulation can be problematic, since their mere classification is not easy and the authorities run the risk of regulating cryptocurrencies according to notions that were thought for other financial instruments.

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For this reason, some government agencies, such as the Securities and Exchange Commission of the United States (SEC), suggest giving cryptocurrencies a classification of values. This is a definition that is comfortable since it allows to set limits and sanctions to those who do not follow the rules currently in force.

This same multifaceted feature seems to return to unclassifiable cryptocurrencies by conventional standards, so only new theories and definitions can lead to appropriate regulations.