The incoming Donald Trump administration is reportedly planning to extend the regulatory power of the Commodity Futures Trading Commission to oversee a major portion of the cryptocurrency market.
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What Happened: The CFTC’s role could soon expand to include the regulation of spot markets for major assets such as Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), along with the exchanges that facilitate their trading, Fox Business reported on Tuesday, citing sources close to Trump’s team.
The proposed move is part of a broader effort by President-elect Trump and the Republican majorities in Congress to scale back the regulatory power that the SEC has exerted over the digital asset industry under President Joe Biden and his outgoing SEC chairman, Gary Gensler.
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Key figures in the incoming Trump administration believe that less stringent regulation is needed to spur innovation in the cryptocurrency business.
If implemented, the move would give the CFTC, the regulator of the U.S. derivatives market, jurisdiction over a nearly $2.24 trillion market for Bitcoin and Ethereum, making up more than 70% of the global cryptocurrency market.
The CFTC didn’t immediately respond to Benzinga’s request for confirmation. A mail sent to Trump’s former campaign spokesman wasn’t responded to either.
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Why It Matters: The CFTC has long considered digital assets like Ethereum as commodities, as stated by CFTC Chair Rostin Benham in his testimony before the Senate Agriculture Committee, in contrast to the SEC’s ambiguous position on the asset.
As for Bitcoin, the asset has long been recognized as a commodity, even by the SEC, protecting it against regulatory scrutiny.
The Trump transition team has been considering the creation of a White House role dedicated to cryptocurrency policy, indicating a potential shift in the U.S. government’s approach to digital assets (source).
This change in regulatory oversight comes as SEC Chair Gary Gensler, known for his stringent regulatory approach towards cryptocurrencies, announced his resignation effective from Trump’s inauguration day.