SPEECHES & TESTIMONY

Statement of Commissioner Dawn D. Stump Regarding the CFTC Technology Advisory Committee Meeting

October 3, 2019

Thank you Commissioner Quintenz for convening today’s meeting of the Technology Advisory Committee (TAC).  I also want to extend my appreciation to the Committee members and presenters for their participation and engagement.

Today’s meeting topics are of immense interest to me, including custody of crypto assets, real world applications of distributed ledger technology specifically as it relates to data privacy, and cybersecurity.  These issues are timely and provide much for the Commission to consider as we embrace technology in our ever-evolving derivatives markets.  In thinking about the topics, one cannot ignore how far our markets have evolved in terms of technology in a very short period of time.  Today’s markets are almost unrecognizable not just due to (maybe some would argue in spite of) regulation but spurred by tremendous innovation.

Predicting that we would be discussing the matters under consideration today would have been difficult to fathom during the nascent years of the Commodity Futures Trading Commission (CFTC).  The TAC agenda reminds me of an interesting article that appeared in The New Yorker late last year, What 2018 Looked Like Fifty Years Ago.[1]  The article examined the book, Toward the Year 2018[2], a compilation of predictions published in 1968 of what the world would look like in 50 years.  Some predictions were not particularly remarkable, such as that “machines will do more of a man’s work.”[3]  Others were especially clairvoyant:  “The transmission of pictures and texts and the distant manipulation of computers and other machines will be added to the transmission of the human voice on a scale that will eventually approach the universality of telephony.”[4]  Some foreshadowed the privacy concerns of today by predicting that all types of sensitive information, such as “[t]ax returns, social security records . . . a criminal record, hospital records . . . [and] bank statements” would be stored on computers that could communicate with one another over a vast international network.[5]  Thus, as The New Yorker article observed, it was predicted that by 2018, “[y]ou could find out anything about anyone, without ever leaving your desk.”[6]

Another interesting prediction from 1968 was that “political and social institutions in the United States will remain flexible enough to ingest the fruits of science and technology without basic damage to its value systems.”[7]  I hope that the CFTC will always stay true to its underlying spirit and principles-based regulation such that this prediction is fully realized.   The pace, breadth, and depth of technological change should be embraced by regulators and provided with guideposts for development and growth, while also encouraging competition and fostering market integrity.  Regulating by principles will limit the risk of stifling innovation and allow for the ongoing improvements we expect from our markets, lest the next half decade not be as revolutionary as the prior.

 

 

[1] Jill Lepore, What 2018 Looked Like Fifty Years Ago; The New Yorker, Dec. 31, 2018, https://www.newyorker.com/magazine/2019/01/07/what-2018-looked-like-fifty-years-ago.

[2] Foreign Policy Association, Toward the Year 2018 (Emmanuel G. Mesthene ed., 1968).

[3] What 2018 Looked Like Fifty Years Ago, supra note 1, quoting Charles R. DeCarlo.

[4] Id., quoting J.R. Pierce.

[5] Id., quoting Ithiel de Sola Pool.

[6] Id.                                                                                    

[7] Id., quoting Charles R. DeCarlo.