REGULATION

Creating a Crypto Commodity Market, CFTC Chairman: Regulated Cryptocurrency Derivatives Will Drive "Legalization of Cryptocurrencies"

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Creating a Crypto Commodity Market, CFTC Chairman: Regulated Cryptocurrency Derivatives Will Drive "Legalization of Cryptocurrencies"

The Chairman of the Commodity Futures Trading Commission (CFTC) stated in a recent interview that regulated derivatives will instill "confidence" in the traditional financial markets towards cryptocurrencies and help legitimize crypto assets.

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CFTC Chairman Heath Tarbert sat down for an interview with Cheddar on Monday, discussing topics such as cryptocurrency compliance, regulated crypto derivatives markets, and the current stance of the CFTC.

Building a Trusted Investment Environment

Tarbert emphasized that the CFTC is working towards establishing a regulated futures market that can provide investors with improved price discovery, hedging, and risk management mechanisms.

Tarbert stated:

By opening up the world of crypto to the CFTC, investors will have easier access to regulated, trusted financial products, ultimately boosting overall confidence in this asset class. I believe this will help legitimize crypto assets and increase liquidity in the crypto market.

Bitcoin and Ethereum Classified as Commodities, Ripple's Status Unclear

During the interview, Tarbert stressed that his views are limited to cryptocurrencies currently classified as commodities by the CFTC, explicitly stating that Bitcoin and Ethereum fall under CFTC jurisdiction, while the regulatory status of Ripple remains unclear. He mentioned:

Over the past year, we have been closely working with the U.S. Securities and Exchange Commission (SEC), carefully considering jurisdictional issues surrounding these cryptocurrencies, but there are currently no clear regulations, making it difficult to determine how these cryptocurrencies should be regulated.

Expansion of the Crypto Derivatives Market

Reports indicate that the market for crypto derivatives is continuously expanding. While mainstream crypto exchanges still dominate, regulated crypto derivatives are gradually threatening their position.

Source: coindesk

As previously reported by ABM, Bakkt, the derivatives exchange under the Intercontinental Exchange (ICE), launched physically-settled Bitcoin futures in September last year, followed by Bitcoin options contracts in December.

Meanwhile, CME Group introduced cash-settled Bitcoin futures back in December 2017, and on the 14th of this month, they launched options on Bitcoin futures, with opening trading volume surpassing Bakkt's first-day volume.

JPMorgan shares a similar view with CFTC Chairman Heath Tarbert, stating recently that CME Group's Bitcoin options contracts will make inroads into traditional financial institutions.

Further Reading

    • UN Secretary-General: UN Must Embrace Blockchain Technology
    • Almost There! China's Central Bank Digital Currency has Completed "Top-Level Design," Will Not Allow Exchange with Cryptocurrencies
    • CME Group to Launch Bitcoin Options Contracts Tomorrow Morning! JPMorgan Observes: Will Make Inroads into Traditional Financial Institutions

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