As the uptake in artificial intelligence tech adoption and cryptocurrencies rapidly reshape the financial sector, Commodity Futures Trading Commission (CFTC) Commissioner Christy Goldsmith Romero urged regulators to “keep pace” or risk falling behind and exposing the most vulnerable to harm.
“AI has been around the financial markets for years … it’s the evolution of AI that we need to be paying attention to,” said Romero in a farewell address delivered at a Brookings Institution event in Washington on May 27.
AI tech has already improved trading efficiency and boosted returns for investors in some cases. But Romero warned that as its use expands, regulators like the CFTC – which oversees U.S. markets for futures, swaps, and some cryptocurrencies to protect against fraud and ensure fair trading – must modernize their oversight.
“I think there’s a lot that’s about to explode there,” said Romero of AI. “I think there’s a lot of real benefit that can come out of it. And I think in terms of regulators keeping pace with that … [you should be] making sure you’re having the promise of AI, but you’re looking out for risk is going to be really important.”
Romero said she brought together AI experts to serve on the CFTC’s Technology Advisory Committee, who recommended that the CFTC focus on internal capacity and communication with regulated entities, rather than rush into adopting new rules.
“They said, ‘Look, we don’t want to step on the evolution of AI,’” Romero recalled. “Do that – get your capacity up internally at the CFTC, start talking to all your regulated entities.”
She pointed to two key areas needing regulatory attention: requiring firms to establish governance structures around AI deployment; and adoption of best practices, like those in the National Institute of Standards and Technology (NIST) AI Risk Management Framework.
Romero said the same AI experts helped her to develop the CFTC’s cybersecurity efforts, including promoting responsible innovation in cryptocurrency – a decentralized digital currency secured by cryptography – which she said should have stronger and clearer regulations.
“Bitcoin, Ether and other spot crypto assets are not regulated, and people think they are,” said Romero. “And we see a lot of times people getting scammed.”
Romero backed efforts in Congress to divide crypto oversight between the CFTC and the Securities and Exchange Commission (SEC), which protects investors in regulated securities. She noted that stablecoin legislation is progressing more quickly than broader reforms to crypto markets.
“A lot of the financial institutions … want to have stablecoin legislation so that they can get into that space,” she said. “I think that will go first, but both have bipartisan support.”
Legislation to regulate how stablecoin issuers operate in the United States is waiting for consideration in the Senate, and would mark the first piece of cryptocurrency regulation in the country. Strengthening the cryptocurrency industry has also been a top legislative priority of President Donald Trump, which has received pushback from Democrats over concerns about the president and his family’s private crypto ventures.
Ultimately, Romero said the goal is to ensure all crypto trading entities –“brokers, exchanges, clearing houses” – are registered and follow the rules.
“Until you actually regulate the trading of crypto, you don’t really understand all the nuances,” she said.