Former Commodity Futures Trading Commission chair Chris Giancarlo said banks may require regulatory clarity around digital assets more urgently than the crypto industry itself, arguing that traditional financial institutions cannot commit large investments in blockchain infrastructure without clear legal guardrails. Speaking on a podcast with Scott Melker on The Wolf of All Streets, Giancarlo said crypto companies have continued building products even during periods of regulatory hostility, while banks remain constrained by legal and compliance requirements that prevent them from moving forward without formal rules.
“Crypto is going to build anyway,” Giancarlo said. “The banks, however, can't afford regulatory uncertainty. Their general counsels are telling their boards that they can't invest billions of dollars in new infrastructure unless the regulatory framework is clear.”
Giancarlo argued that the lack of clarity primarily affects traditional financial institutions, which operate under stricter compliance obligations than crypto-native firms.
Banks Facing Pressure To Modernize Financial Infrastructure
Giancarlo said many banks recognize that their current financial infrastructure is based on legacy systems that could eventually be replaced by blockchain-based settlement networks.
According to him, traditional banking operates on what he described as an “analog network system,” while digital asset infrastructure represents a new model for financial markets.
If banks delay modernization, he warned, financial innovation may shift to other jurisdictions, leaving U.S. institutions at a disadvantage.
He compared the situation to earlier technology transitions in payments, noting that U.S. banks historically delayed adopting chip-enabled credit cards even after other regions implemented them.
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In Giancarlo’s view, a similar risk exists with digital asset infrastructure if financial institutions fail to engage early with blockchain-based systems.
Regulatory Clarity Debate Centered On Market Structure Legislation
Giancarlo linked the need for clarity primarily to pending U.S. legislation aimed at defining how digital asset markets should be regulated.
He said the so-called “Clarity Act,” which seeks to define the jurisdictional boundaries between regulators such as the Securities and Exchange Commission and the CFTC, is a key step in providing legal certainty for financial institutions.
While Giancarlo estimated the bill still has a chance of passing, he acknowledged that political divisions and disagreements between traditional finance firms and crypto companies are complicating the process.
He suggested that moderate lawmakers from both parties could ultimately push the legislation forward, arguing that modernizing financial infrastructure is necessary for the United States to maintain its global financial leadership.
Crypto Innovation Expected To Continue Regardless Of Regulation
Despite the legislative uncertainty, Giancarlo said crypto development is unlikely to slow significantly because entrepreneurs and developers are willing to build regardless of regulatory conditions.
He noted that digital asset innovation continued even during periods when regulators took a more aggressive enforcement approach toward the sector.
The primary risk, he suggested, is not whether crypto will develop but where it will develop.
“If innovation is blocked in the United States, it will simply move to Europe or Asia,” he said, adding that digital financial rails will continue to be built globally regardless of U.S. policy decisions.
Giancarlo also framed blockchain technology as a structural shift in financial architecture that enables more direct interaction with financial systems, potentially expanding access to financial services beyond traditional banking intermediaries.