The chairman of the Commodities and Futures Trading Commission believes regulated derivatives will instill market confidence in cryptocurrencies.
Chair Heath Tarbert told Cheddar Monday his agency is helping create a regulated futures market investors would be able to "Rely on" for better "Price discovery, hedging and risk management."
"By allowing to come into the world of the CFTC," investors can better access trusted and regulated financial products, improving overall confidence in the asset class, according to Tarbert.
The marketplace for cryptocurrencies derivatives is expanding.
Although still dominated by unregulated exchanges, it is gradually facing greater competition from regulated alternatives.
Bakkt launched physically delivered bitcoin futures last September and CME, which first launched bitcoin futures in December 2017, opened trading for options contracts Monday.
In the interview, Tarbert reiterated that his perspective will only extend to cryptocurrencies the CFTC currently classifies as commodities.
In an op-ed published on the CFTC website November, Tarbert argued regulators should adopt a greater "Principles-based approach" to the asset class.
The CFTC first defined bitcoin as a commodity in 2015, confirming the classification when it gave the go-ahead to CME and Cboe to launch regulated futures at the close of 2017.
When asked by Cheddar whether any other cryptocurrencies, such as XRP, could soon be defined as commodities, Tarbert told investors "To watch this space" as the CFTC works closely with the SEC to "Really think about which [crypto] falls in what box."
Regulated Derivatives Will 'Legitimize' Crypto, Says CFTC Chair
Published on Jan 14, 2020
by Coindesk | Published on Coinage
Mentioned in this article
Darknet, cryptocurrency and two intersecting health crises
These even include teenagers who run Bitcoin drug businesses on the darknet.
Centralized finance is necessary, especially for DeFi crypto investors
If you're paying attention to developments in the cryptocurrency space, you've likely heard of decentralized finance and of the yield farming trend that helped it get over $9 billion worth of crypto assets locked in it.
Ultimate Bitcoin bull case: trader says 23 factors show a rally is due
A pseudonymous Bitcoin trader outlined 23 key technical and fundamental factors that could buoy BTC's medium-term bull case.
Banks must establish infrastructure for digital assets before it's too late
In the middle of the year, the digital asset custody industry saw welcome developments when the Office of the Comptroller of the Currency officially announced that all nationally chartered banks in the United States can provide custody services for cryptocurrencies.