Former CFTC Chair Chris Giancarlo on the US Leading New Markets

Why did America capital markets take three days to settle stock trades for decades?

According to former CFTC Chairman Chris Giancarlo, the answer had little to do with capacity and everything to do with the postal service.

"We had three-day settlement in this country for the longest time," Giancarlo told Coinage in a new interview. "Why? Because the standard delivery time for U.S. mail was three days."

It sounds absurd today. But for Giancarlo, it's a reminder that many of the rules governing modern finance weren't designed for a digital world. They were designed around physical limitations that no longer exist.

That realization sits at the center of a debate now unfolding across Washington, Wall Street, and the crypto industry. As prediction markets, decentralized finance, perpetual futures, and tokenized assets continue to gain traction, regulators are being forced to confront a fundamental question: Should financial markets continue to operate under frameworks built for an analog era?

Giancarlo believes the United States has an opportunity to answer that question correctly — and in the process establish itself as the global leader in a new generation of markets.

"The worst thing about innovator's dilemma is the fear of having the government come after them just because they're creating something that's never been created before," Giancarlo said.

For years, that fear defined crypto's relationship with Washington. Founders often found themselves navigating unclear rules while regulators relied heavily on enforcement actions to define policy. Giancarlo argues that environment discouraged experimentation precisely when innovation was accelerating.

"Thank goodness we're done with that," he said. "We're now in an environment where innovation is celebrated."

That shift arrives as regulators face some of the most consequential market structure questions in decades.

Among them are prediction markets, which have rapidly emerged as one of the most controversial and fastest-growing sectors in crypto. Platforms like Polymarket and Kalshi have attracted millions of dollars in volume while drawing scrutiny from regulators and critics who question whether they should be treated as financial markets or gambling products. Giancarlo sees the distinction as clear.

"Prediction markets are very much here to stay and are going to grow in enormous social utility and popularity," he said. Giancarlo also previously served on Polymarket's board.

The former regulator argues that prediction markets solve a problem that traditional polling and forecasting often cannot, aligning incentives around collective information.

"During any weather event, the most popular channel on television is the Weather Channel," he said. "People like a degree of certainty."

The same principle, he argues, can be applied to far more important questions than whether it will rain tomorrow.

"Think about things in life that are actually more impactful on your life than the weather. Things like interest rates, gas prices, homeownership."

The rise of these markets has triggered familiar criticisms around market manipulation, insider information, and market makers. Giancarlo dismisses many of those concerns as misunderstandings of how financial markets have always functioned.

"Market making is a feature of every mature market," he said. Likewise, he argued that the existence of insider trading risks does not invalidate an entire asset class.

"The bulk of insider trading is taking place right now in our over-the-counter oil markets and in our exchange-traded oil markets," he said. Rather than banning new markets because bad actors may exist, regulators should focus on enforcing existing rules.

"What we need to do is just enforce the law."

Prediction markets are not the only area where crypto is influencing traditional finance. Giancarlo pointed to the rapid rise of perpetual futures trading and platforms like Hyperliquid as evidence that crypto-native innovation is already forcing incumbent institutions to adapt.

"In the last three months, every major exchange here in the United States has announced it's going to 24/7 trading," he said. The timing is no coincidence.

"Why are they doing it now? Because of Hyperliquid."

For decades, traditional markets operated according to schedules dictated by exchanges, clearinghouses, and legacy infrastructure. Crypto demonstrated that global markets could operate continuously, allowing traders to manage risk whenever events occur rather than waiting for markets to reopen.

"Events happen around the clock," Giancarlo said. "Markets should be available to hedge the risk of things happening around the clock as well."

The implications now stretch well beyond crypto trading.

Tokenized assets, digital securities, and blockchain-based settlement systems are increasingly forcing regulators to reexamine assumptions that have governed markets for generations. Giancarlo argues that many of those assumptions were products of technological limitations rather than economic necessity.

"Once you go digital, a lot of those physical limitations fall away," he said. The result is an opportunity to redesign markets around outcomes instead of constraints.

"Now you can design not around limitations, but around outcomes you want."

Coinage is a community-owned DAO letting our NFT holders become actual co-owners in one of the fastest-growing Web3 media outlets. Mint an NFT and become a member today to open a path to patronage dividends, or stake with us to support our project.