The U.S. derivatives regulator has just taken a major technological step that will have a significant impact on the industry.$BNB
The U.S. Commodity Futures Trading Commission (CFTC) has removed outdated guidelines.
On December 11, the acting chair of the U.S. Commodity Futures Trading Commission (CFTC), Caroline D. Pham, announced that the agency would withdraw its outdated guidance on the 'actual delivery' of virtual currencies.
By eliminating this significant regulatory barrier, the U.S. Commodity Futures Trading Commission (CFTC) has taken a pragmatic approach that opens the door to regulated leveraged crypto products under the Commodity Exchange Act (CEA).
Essentially, the agency's goal is to move cryptocurrency trading from offshore platforms and firmly place it under U.S. regulation.
In this regard, I commented: Acting Chair Mr. Fan stated:
"Eliminating outdated and overly complex guidelines that penalize the cryptocurrency industry and stifle innovation is exactly what this administration has set out to do this year."
Pham added:
"Today's announcement indicates that decisive action can promote entry into a safe U.S. market, achieving real progress in protecting the American people."
If there is a failure to 'actually deliver' within the strict 28-day deadline, meaning the buyer fails to gain full possession and control, the transaction is classified as a futures contract.
This classification immediately triggered the strictest regulatory requirements from the U.S. Commodity Futures Trading Commission.
Some background on the 28-day rule
Regulators launched the 28-day rule in March 2020, reflecting uncertainty about the trajectory of the virtual currency market.
This regulation set an important regulatory barrier, pushing cryptocurrencies into a special category that distinguishes them from traditional commodities.
Therefore, federally regulated exchanges like designated contract markets find it extremely difficult to offer competitive leverage products to retail users.
Now, with the repeal of the rule, the U.S. Commodity Futures Trading Commission (CFTC) is taking significant steps toward normalization. Under the CFTC's broader, technology-neutral framework, Bitcoin and Ethereum are being treated more like traditional commodities.
What new changes will we see?
With the repeal of the old rules, the agency is drafting updated guidelines and FAQs to take their place. At the same time, the agency is actively seeking public input through its ongoing 'crypto sprint' program.
As background information, the U.S. Commodity Futures Trading Commission (CFTC) launched a pilot program allowing the use of digital assets, including BTC, ETH, and USDC, as collateral for regulated derivatives markets.
This initiative establishes a clear framework for tokenized collateral and provides market participants with the regulatory certainty they have been looking for.
At the same time, it has removed outdated restrictions and regulations that have been replaced by new legislation such as the (Genius Act).
These changes collectively mark an important step toward a more streamlined and modern regulatory environment.
Who will be the next chairman of the U.S. Commodity Futures Trading Commission (CFTC)?
The Senate is moving toward a final confirmation vote on President Trump's nominees for CFTC and FDIC leadership positions.
Earlier this week, lawmakers voted 52 in favor and 47 against, passing a resolution to schedule final voting on a large number of nominees for early next week.
As part of this process, senators are reviewing 97 confirmation questions. These questions pertain to Mike Selig, nominated as chairman of the U.S. Commodity Futures Trading Commission (CFTC), and Travis Hill, nominated as permanent chairman of the Federal Deposit Insurance Corporation (FDIC).
If both nominees are confirmed next week, the transition period will end. This will establish a permanent, coordinated regulatory framework aimed at placing most digital asset activities under U.S. regulation.
Final thoughts
By eliminating the restrictive 28-day rule, the agency has removed one of the biggest obstacles preventing regulated platforms from offering competitive leverage products.
The pilot program allowing BTC, ETH, and USDC as collateral has officially realized the use case that institutions have long awaited.
