As a seasoned crypto investor with a decade-long journey under my belt, I can’t help but feel a wave of optimism sweeping over me following the latest announcement by the Commodity Futures Trading Commission (CFTC). The endorsement for blockchain technology in managing trading collateral is not just a step forward; it’s a giant leap towards mainstream adoption.
The Commodity Futures Trading Commission supports employing blockchain technology for managing collateral during trades in the U.S. derivatives market, as indicated in a report published on November 21st by the CFTC’s Global Markets Advisory Committee.
The report indicates that blockchain technology solutions such as distributed ledgers and digital tokens have the potential to overcome persistent issues faced by conventional derivative markets and broaden the range of assets suitable for collateral trades.
Worldwide, numerous instances of effective and verified asset tokenization in business applications have been observed, according to CFTC Commissioner Caroline D. Pham’s statement, further emphasizing:
“Now, we can finally begin to make progress on US regulatory clarity for digital assets.”
According to the report, one advantage of blockchain networks is that they allow for swift, continuous transactions of the specified asset around the clock, without requiring expensive or intricate connections through various intermediaries.
In simpler terms, this system allows individuals who own an asset to transfer or lend it to someone else directly, without needing a broker’s involvement.
Traders frequently need to deposit security deposits, commonly known as “margin,” to guarantee their transactions are fully settled once they’ve been executed.
The Commodity Futures Trading Commission (CFTC) is responsible for regulating the markets where commodity derivatives, including futures and options, are traded. This regulatory body also plays a significant part in monitoring U.S. digital currency markets, specifically cryptocurrencies.
Donald Trump, the future president of the United States who has expressed plans to make the U.S. a leading nation in cryptocurrency, is considering appointing a commissioner who supports cryptocurrencies to head the Commodity Futures Trading Commission (CFTC) when his term begins on January 20, 2025.
With U.S. President Joe Biden in office, both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have adopted firm regulatory measures concerning cryptocurrencies. These agencies initiated more than 300 enforcement actions against crypto-related companies.
Among the potential candidates for chairing the Commodity Futures Trading Commission (CFTC) is Summer Mersinger, a Republican commissioner who has advocated for a more lenient approach towards cryptocurrency regulation within the agency.
Commissioner Pham has additionally expressed supportive views towards cryptocurrencies, such as criticizing the Commodity Futures Trading Commission (CFTC) in September for accusing Uniswap, a decentralized platform for exchanging digital assets, of operating an unregistered futures trading exchange.
On November 21st, it was revealed that Gary Gensler, a well-known advocate for strict cryptocurrency regulations and current Chairman of the Securities and Exchange Commission (SEC), has planned his departure from the SEC, which is expected to occur on January 20th, 2025.
Before the aftermath of the elections, it was already noticeable that regulatory bodies and trading platforms were growing increasingly open to using tokenized assets as security for transactions.
In September, the Depository Trust and Clearing Corporation (DTCC), which serves as the U.S.’s main hub for settling securities transactions, concluded a trial run examining the possibility of employing digitized U.S. Treasury bills in securing trades.
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2024-11-23 01:03