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

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A commissioner with the Commodity Futures Trading Commission (CFTC) has proposed the “first-ever” pilot program in the U.S. “to support the development of compliant digital asset markets and tokenization.” The regulator emphasized: “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 regulate crypto assets on Thursday. She posted on social media platform X:

It’s time to take action. I propose the first-ever U.S. pilot program for digital asset markets as a regulatory sandbox to test, gather data, & examine innovation. This creates a safe framework for new technologies & market structures under existing regulations & protections.

During her remarks at the Cato Institute on Thursday, the commissioner explained that the “wait and see” approach currently adopted by U.S. regulators towards the potential opportunities of blockchain technology and digital assets “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 noted that the pilot program she is proposing will incorporate previous pilot initiatives which focused on areas such as trading rules, reporting requirements, registration requirements, and risk disclosure requirements.

The commissioner also emphasized that given the CFTC’s oversight of the world’s largest financial markets, the regulatory body bears “a responsibility to proactively take on new challenges instead of passive observation.” She stressed:

That’s why I’m recommending a time-limited CFTC pilot program to support the development 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 think about the proposal by CFTC Commissioner Caroline D. Pham for the regulation of crypto assets? Let us know in the comments section below.