Banking Sector Requires Crypto Regulation More Than Industry Itself, Former CFTC Leader Claims
Chris Giancarlo, who previously led the CFTC, argues that American banking institutions have a greater need for clear cryptocurrency regulations than the crypto sector itself, cautioning that postponement risks positioning US banks behind competitors in worldwide payment system advancement.
American financial institutions have emerged as the primary stakeholders requiring cryptocurrency regulatory clarity, contends Chris Giancarlo, who previously served as chairman of the US Commodity Futures Trading Commission. He maintains that these institutions face the danger of lagging behind international competitors in the evolution of payment systems.
Speaking during a Sunday broadcast of Scott Melker's The Wolf Of All Streets Podcast, Giancarlo explained that cryptocurrency developers will persist in their work regardless of whether the Senate approves its crypto market structure legislation. In contrast, banking institutions will remain reluctant to commit resources to the technology without defined regulatory frameworks.
"The banks, however, can't afford regulatory uncertainty. Their general counsels are telling their boards, you can't invest billions of dollars in this… unless you've got regulatory certainty. The banks need this more than crypto," he said.
"I think there's a recognition that this is the new architecture of finance and America, our financial institutions are the world's dominant financial institutions. We need to modernize that. We need to adopt this technology."
US banks will fall behind if they wait too long on crypto
The legislation addressing crypto market structure, referred to as the CLARITY Act, has encountered obstacles in the Senate due to ongoing disagreements among banking institutions, cryptocurrency companies, and legislators regarding essential elements including the question of permitting stablecoin yields.
Giancarlo cautioned that should American banks postpone cryptocurrency integration for an extended period, nations across Asia and Europe will advance ahead, resulting in the US banking infrastructure falling behind.
"Digital rails will be built. And then the American banks will say, whoa what happened here? Our analogue identity-based, message-based system is no longer working anywhere outside the US, we need to modernize. They'll be on the back foot," he said.
"The banks need this clarity because they need to build this, they need to be in the forefront, not in the rear guard of this innovation," Giancarlo added.
CLARITY Act failure could prompt workarounds
The proposed crypto market structure legislation received approval from the House of Representatives in July 2025 and has been submitted to the Senate Committee on Banking, Housing, and Urban Affairs ahead of a possible vote by the full Senate, as documented by Congress.
Should the legislation clear the Senate, it will proceed to US President Donald Trump for his signature. In the event of failure or lack of presidential approval, Giancarlo indicated that leadership at the SEC and CFTC would probably intervene to develop regulatory frameworks on their own authority.
"If it doesn't get done, I do believe that under leaders like Paul Atkins at the SEC and Mike Selig at the CFTC, they will write the kind of rules that will make this work for now. They won't have the support of legislation that makes it work forever or at least into the next presidential cycle, but it'll make it work for now," he said.
"Now, does that give the industry the certainty they want? No. And who needs that certainty more than the banks? Crypto doesn't need it. They were building even under the whip hand of Gary Gensler."