CFTC Commissioner Proposes ‘First-Ever’ US Pilot Program for Crypto Regulation

A commissioner with the Commodity Futures Trading Commission (CFTC) has proposed the “first-ever” pilot program within the U.S. “to support the development of compliant digital asset markets and tokenization.” The regulator emphasised: “Our principles-based framework is built for innovation in technology, new products, and market structure.”

‘Time-Limited CFTC Pilot Program’ for Crypto

Commodity Futures Trading Commission (CFTC) Commissioner Caroline D. Pham unveiled her proposal for a regulatory sandbox program to control crypto belongings on Thursday. She posted on social media platform X:

It’s time to take motion. I suggest the first-ever U.S. pilot program for digital asset markets as a regulatory sandbox to check, collect knowledge, & study innovation. This creates a secure framework for brand spanking new applied sciences & market constructions beneath present rules & protections.

During her remarks on the Cato Institute on Thursday, the commissioner defined that the “wait and see” strategy at the moment adopted by U.S. regulators in the direction of the potential alternatives of blockchain expertise and digital belongings “falls short of the proactive measures needed in this rapidly evolving industry.”

Noting that she has “consistently called for the CFTC to use [its] existing authority to provide regulatory clarity for digital assets to ensure that robust guardrails are in place,” the commissioner detailed: “Our principles-based framework is built for innovation in technology, new products, and market structure.”

She famous that the pilot program she is proposing will incorporate earlier pilot initiatives which centered on areas equivalent to buying and selling guidelines, reporting necessities, registration necessities, and threat disclosure necessities.

The commissioner additionally emphasised that given the CFTC’s oversight of the world’s largest monetary markets, the regulatory physique bears “a responsibility to proactively take on new challenges instead of passive observation.” She burdened:

That’s why I’m recommending a time-limited CFTC pilot program to assist the event of compliant digital asset markets and tokenization.

“As a first step, the CFTC should call for a roundtable to engage all stakeholders,” she described. “After that, the CFTC should propose and adopt rules establishing a pilot program for a specific period of time that incorporates many of the components drawn from past pilot programs, including registration and eligibility requirements, financial resources and other conditions, risk management, products and contract terms, and other requirements including disclosures and reporting.”

Pham added: “At the conclusion of the pilot program, the Commission should examine the data gathered from the pilot and consider whether there should be a permanent change to our rules.” She concluded: “This proposal shows us how the CFTC can safely explore innovation while maintaining appropriate protections for our markets.”

What do you consider the proposal by CFTC Commissioner Caroline D. Pham for the regulation of crypto belongings? Let us know within the feedback part beneath.