Future trading commission commodities (CFTC) abandoned a key directive which had previously pointed out a meticulous examination of digital asset derivatives.
This decision indicates a more user-friendly regulatory climate for digital assets in the United States, taking into account the Pro-Crypto position of the Trump administration.
CFTC loose monitoring of cryptographic derivatives
The CFTC withdrawn the staff board n ° 23-07 and n ° 18-14 by its compensation and risk division (DCR).
The first, published in May 2023, focused on the risks of cleaning digital assets. Meanwhile, they target the lists of virtual currency derivatives.
During the creation, the two guidelines alluded to the simple fact of cryptographic products for more difficult monitoring.
However, the two have now been deemed unnecessary, in force immediately, in the mid -level of the regulator of goods towards regulatory consistency.
The decision indicates a change to the treatment of digital asset derivatives such as those on Ethereum (ETH) as traditional financial products (tradfi).
“As indicated in today’s withdrawal letter, the DCR has decided to withdraw the notice to ensure that it does not suggest that its regulatory treatment of digital asset derivatives will vary from its treatment from other products,” said the CFTC.
This decision will eliminate the perceived distinctions between digital asset derivatives and tradfi instruments.
It also opens the way to increased market participation, which will facilitate a broader involvement of financial institutions in the digital asset derivative market. This could result in an increase in the liquidity and maturity of the market.
However, the opinion warned the derivative compensation organizations (DCO) to prepare for assessments of specific risks to the unique characteristics of digital products.
Therefore, although it reflects the commitment of the CFTC to promote innovation, it also suggests the intention to maintain solid financial surveillance.
Meanwhile, this decision only occurs weeks after the office of the currency controller (OCC) allowed American banks to offer crypto and stablecoin services without prior approval.
However, the OCC had expressed that despite the lifting of the approval requirement, banks must maintain solid controls for risk management similar to those required for traditional banking operations.
“The OUC expects the banks to have the same strong risk management controls to support new banking activities as for the most traditional,” said Rodney E. Hood, the interim controller of the currency.
Consequently, the CFTC decision to eliminate regulatory biases from cryptographic derivatives marks a major gap in American policy. On the one hand, the CFTC seeks to remove the distinction between cryptographic derivatives and tradfi instruments.
On the other hand, the FDIC (Federal DEPOSIT Insurance Corporation) and WEST want banks to maintain controls of risk management similar to those required for traditional banking operations despite the provision of cryptography and stablecoin services.
Notwithstanding, these efforts reflect an increasing trend among American financial regulators to reduce obstacles and promote responsible innovation in cryptographic industry.
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