The Commodity Futures Trading Commission (CFTC) is commencing regulation of crypto perpetual futures contracts aimed at shifting trading onshore, which may impact the cryptocurrency market.
Regulatory Feedback Sought for Crypto Perpetuals
The CFTC is seeking public input on regulatory frameworks for crypto perpetual contracts due to increasing interest from exchanges. This initiative could enable platforms like Binance to enter the US market. Outgoing Commissioner Summer Mersinger announced the review of exchange applications to offer these products. Major exchanges are closely monitoring regulatory changes.
Potential $100B Daily Trading Volume Shift
A potential shift of $100 billion in daily trading volume to onshore markets is anticipated. If perpetual contracts are approved, institutional players and exchanges may see new opportunities in US markets. Regulation could boost liquidity and increase compliance demands for market participants.
Lessons from 2017 Bitcoin Futures Experience
The introduction of Bitcoin futures in 2017 by the CFTC similarly legitimized cryptocurrency derivatives trading in the US. Following regulatory approval, there was a surge in institutional activity. Future outcomes may include increased market legitimacy and trading activity.
CFTC's regulation of crypto perpetual futures may represent a significant step in the development of the cryptocurrency market in the US, opening new opportunities for participants and potentially increasing legitimacy and trading volumes.
