The CFTC legitimizes crypto further hoping to attract more institutional investors thanks to regulatory clarity. In our latest cryptocurrency news, we find out more about their decision to regulate cryptocurrencies.
The CFTC legitimizes crypto and makes the regulation of digital assets a priority for the near future. The regulator focuses on enhancing liquidity in the US derivatives market which could limit the number of cryptocurrencies allowed for regulated derivatives. As a central question in the US regulatory sphere, accepting digital assets by the regulator will be a milestone for the industry. With the new strategic plan for 2020-2024, the CFTC Will create a framework to regulate and promote digital assets. Alongside the IPO dreams Coinbase has, this could be a huge catalyst for major adoption in North America.
Cryptocurrencies are unregulated assets in most parts of the world. Despite the discussions on international forums such as G20 about the regulation of crypto, there were no real efforts from major governments across the world. This could soon change as the US Commodity Futures Trading Commission will set sights on the sector. The CFTC says they will develop a holistic framework to promote innovation in digital assets dubbing digital assets as the 21st-century commodities. Innovation is usually thrown around by major crypto projects often but the regulator’s definition is much broader than this. The strategic plan offers more clarity on precisely how the regulator could deal with digital assets.
As a part of the plan to make commodity derivative markets resilient and to boost the institutional investors to join the market, the CFTC wants to promote liquidity and transparency among all trading assets. The markets are quite illiquid now and this focus means that only the top ten digital assets will make it. As the United States regulator for Commodity derivatives is a part of the crypto fight in North America, it seems that there is a good chance of winning. The agency also declared its belief in ETH and BTC and saying they are commodities not securities. The statement was backed up by the regulator issuing a license for regulated ETH futures to the crypto platform ErisX.
Also, as Coinbase acts on becoming a publicly-traded company, there are a few other catalysts in play that could boost the case for crypto. Regulators offer clarity on how digital assets are treated and there is a huge potential for new capital to flow into the industry.
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