The decentralized system has replaced the bank and has given freedom to trade and the idea was to add security to the system. Perhaps it was not thought thoroughly as total independence is more volatile than beneficial. The regulators after the global adoption of the crypto and blockchain currency in particular.
The idea to put an authority is to stop the wrong that might come with the virtue. Regulators need to stay on the fine line where they do not intervene with innovation. U.S. Commodity Futures Trading Commission Chairman J. Christopher Giancarlo said, "When it comes to the oversight of cryptocurrencies, regulators need to avoid inhibiting innovation, yet be vigilant against manipulation." He further added "the internet flourished because the government did not step in too heavily, and applied a "do no harm" approach." He also gave his views on cryptocurrency "And I'm advocating the same approach to cryptocurrencies and all things having to do with this new digital revolution of markets, and of currencies, and of asset classes."
But, at the same time, caution is required because some kinds of fraud and manipulation often seen in foreign exchange and precious metals are now taking place in cryptocurrency markets, he said.
"When it comes to fraud and manipulation, we need to be strong. When it comes to policy making, I think we need to be slow and deliberate and well informed," he shared his views on cryptocurrency future and the regulating laws required.
The CFTC is responsible for regulating commodity, futures and derivatives markets, said in 2015, cryptocurrencies are commodities. Virtual currencies like bitcoin can be regulated as commodities by the U.S. Commodity Futures Trading Commission, a federal judge ruled this year.
The virtual currency market is as fraudulent as the normal market and the need to put a command over it is a necessity. The CFTC and Securities and Exchange Commission (SEC) both have already warned about the vulnerabilities related to it and the need to fight with it.
As far as the need is concerned, the critics for authorities to form the necessary regulation are moving too slow. On his offence, Giancarlo pointed to how bitcoin futures are now allowed in the U.S. and said "Some would say we're too slow, others have said we've been too fast. So, we at the CFTC, saw the very first regulated offerings of bitcoins futures." He further added, "No other regime in the world has allowed this to go forward."