CFTC Chair Urges U.S. to Prioritize Derivatives Innovation Over Global Consensus
CFTC Chair Michael S. Selig argued that the United States should prioritize domestic innovation in derivatives markets over deference to international regulatory consensus.
In an op-ed published in The Economist, Mr. Selig said that nearly half of the more than $1.2 quadrillion global derivatives market falls under CFTC jurisdiction and pointed to recent agency actions as evidence of American leadership.
He pointed to steps the CFTC took under President Donald Trump. Mr. Selig highlighted the CFTC's approval of the first "true" bitcoin perpetual futures contract, a derivative with no fixed expiration that relies on a periodic funding-rate mechanism to track spot prices. He added that, following the enactment of legislation that creates the first comprehensive federal framework for dollar-backed stablecoins usable for payments, the CFTC is exploring how regulated stablecoins could be used as collateral in derivatives markets. He also cited the launch of round-the-clock gold futures trading and ongoing engagement on potential perpetual futures for non-crypto assets.
On prediction markets, Mr. Selig criticized nine European financial regulators for arguing that event contracts traded on prediction markets should be classified as gambling rather than financial instruments. Mr. Selig said this view misreads how prediction markets are structured as marketplaces rather than wagers with a "house," and noted that such markets improve price discovery, citing their success forecasting the 2024 presidential election and Federal Reserve research showing they can perform as well as or better than traditional estimates for economic indicators.
Mr. Selig said cross-border cooperation remains valuable but argued that access to U.S. derivatives markets is a privilege. He called for international agreements and supervisory arrangements to be "regularly modernised" to reflect evolving market structures and technology while protecting American market interests.