CFTC to develop 'holistic framework' for crypto assets by 2024

Quick Take

  • The CFTC is set to develop comprehensive regulations for cryptocurrencies by 2024 
  • The derivatives regulator has said: “We will develop a holistic framework to promote responsible innovation in digital assets”

The U.S. Commodity Futures Trading Commission (CFTC), the country’s derivatives regulator, is set to develop comprehensive regulations for cryptocurrencies.

In its finalized strategic plan for 2020-2024, published on Wednesday, the CFTC said: “We will develop a holistic framework to promote responsible innovation in digital assets.”

The regulator said it had granted designated contract market (DCM) licenses for exchanges "specializing in futures relating to digital assets,” referring to the likes of ErisX and Bitnomial (both the exchanges are cleared by the CFTC to offer bitcoin futures).

The CFTC further acknowledged that market regulation needs to keep pace and even lead to encourage responsible innovation. “The CFTC must promote responsible innovation, avoiding rules and approaches reflective of business practices long gone,” it said.

The regulator currently classifies bitcoin (BTC) and ether (ETH) as commodities, and hence there are futures contracts legally available for both (for now, only ErisX offers ether futures).

XRP's status as a security or commodity is not yet clear. Earlier this year, CFTC chairman Heath Tarbert said that the regulator is closely working with the Securities and Exchange Commission (SEC) since over the last year “to really think about which falls in what box."

If an asset is a commodity, it falls under the jurisdiction of the CFTC, and it's a security that falls under the SEC's jurisdiction.

"Once you start seeing more clarity on whether something is or is not a security, you will start seeing more futures listed on digital assets,” Tarbert said in an interview yesterday.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Yogita is a senior reporter at The Block and covers all things crypto. Before joining The Block, Yogita worked for CoinDesk and The Economic Times. She can be reached at [email protected] Follow her on Twitter @Yogita_Khatri5.