CFTC Commissioner Bart Chilton Considers Regulating Bitcoin
Bart Chilton, Commodity Futures Trading Commission Commissioner, appeared on CNBC's Squawk Box Tuesday to discuss having his eye on the digital currency Bitcoin.
The peer-to-peer electronic cash system isn't currently managed by a central authority, and because Bitcoin is accepted by many people and merchants globally, a good portion of its trade in commercial use is believed by many to be used for illegal activities, such as the purchase of guns and drugs, human trafficking and international gambling.
Additionally, Bitcoin is a roller coaster in terms of its value.
"It's huge. I don't have the exact numbers, but the volatility in it is amazing, I mean, it's gone up to where one Bitcoin is worth $266 bucks, it's gone back down to $50, it's about $110 right now," said Chilton.
Despite the risks of illegal activity, Chilton isn't 100 percent certain that the Bitcoin should be regulated. He said that if anyone is going to regulate it, however, then the CFTC should consider taking a shot at it.
"If it's a commodity that is used as a derivative. So if somebody's buying it and holding it for the future, then it's something that we at least could regulate, squarely," said Chilton.
But how could the CFTC find the grounds for which to regulate an internationally accepted currency in the United States?
"They're traded all over the world, and that's one difficulty, I mean it's a cyber currency, so how do we get to it? And the answer, if we wanted to, and the answer is that, if it's traded in U.S. commerce, if it's traded on our computers, we could potentially oversee it," said Chilton.
"Now again, we have to look at the facts and circumstances, but people are actually loosing real money on this."
Chilton said that the CFTC might want to insert a credential regulation if people aren't being backed up due to issues like transactions not clearing or the lack of a margin requirement. According to Chilton, regulating Bitcoin prevents it from being a house of cards that can impact people.
Chilton emphasized the importance of not letting a shadow currency that can potentially go towards illegal activities go unchecked.
"My job's a regulator. I'm going to look after it," said Chilton.
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