The Commodity Futures Trading Commission (CFTC) is looking at the possibility of using today’s distributed ledger technology to bring speed, security and other efficiencies to monitoring swap transactions in what is called “Swaps Regulation 2.0.”
The current consideration envisions the CFTC as a supervisory node in a distributed ledger platform, poised to monitor swap transactions as they take place.
In this new Blockchain + The Law article by Cheryl Aaron, a regulator node is described as possibly being a considerable advantage to both regulators and regulated entities. It could enable participants to better comply with their reporting and recordkeeping requirements by accessing the data they need “to properly understand and regulate the market without any intermediaries, and potentially for a lower cost.”
Aaron writes, “By relying on a blockchain-based reporting and recordkeeping system, swap market participants could potentially eliminate the middleman (swap data repositories) entirely.”