TRM’s Ari Redbord and other leaders focus on DeFi during inaugural CFTC Technology Committee meeting
Last week, the U.S. Commodities Futures Trading Commission (CFTC) held its first meeting of the Technology Advisory Committee (TAC).
Founded in 1999 to advise the Commission on issues at the intersection of technology, law, policy, and finance, the TAC is comprised of business leaders from the cryptocurrency, cyber and AI space, and sponsored by Commissioner Christy Goldsmith-Romero.
Commissioner Goldsmith-Romero kicked off the meeting by explaining, in prepared remarks, that “understanding how DeFi works” is important, as “policy decisions related to DeFi” are currently being made by regulators and lawmakers.
TRM’s Ari Redbord, Vice Chair of the TAC, built on the Commissioner’s introduction in his opening remarks, stating that “Any discussion of regulation of decentralized finance should begin with the promise of decentralized finance.”
Redbord explained that while the collapse of FTX has been the focus of headlines and policy makers:
“....the true promise of blockchain technology is DeFi. DeFi is Financial services offered without a traditional financial intermediary delivered via a software program or “smart contract” which uses distributed ledger technology and enables peer-to-peer transactions. DeFi enables an ecosystem of peer-to-peer financial services untethered from many of the issues that plague our current system and offers the promise of financial inclusion. Peer-to-Peer cross border value transfer at the speed of the internet. That is the promise.”
Redbord then discussed how the native properties of public blockchains — data that is Transparent, Traceable, Public, Permanent, Private, and Programmable — can allow anyone – from regulators to financial integrity professionals, average citizens to law enforcement – to more readily identify risks to the financial system.
Also during the DeFi session, Committee Chair Carole House, former Treasury and White House official now of venture firm Terranet Ventures, and Jill Gunter, chief strategy officer of blockchain infrastructure company Espresso Systems, provided an overview of the current solutions for digital identity and noncustodial wallets, using the examples of the Ethereum Name Service and MetaMask wallet.
Fireblocks founder Michael Shaulov and Trail of Bits founder Dan Guido then presented the exploits and vulnerabilities that have, and continue to, take place in the market.
The DeFi portion of the meeting ended with members unanimously voting for creating a Digital Assets and Blockchain Technology Subcommittee, focussing on the “why of DeFi,” what problems it solves, use cases, vulnerabilities, and proposed legal and policy frameworks.
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