SEC and CFTC to Onshore Perpetual Contracts
In a bid to tighten crypto regulation, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) plan to harmonize oversight and bring perpetual contracts onshore. The agencies will host a joint roundtable on September 29 to develop frameworks for perpetual contracts and 24/7 trading markets. They will also explore portfolio margining to reduce capital inefficiencies and create safe harbors for peer-to-peer crypto trading via DeFi protocols. This initiative aims to address regulatory uncertainty that drove financial innovation overseas. Recent guidance now lets US-registered exchanges offer spot crypto trading. Clear rules for perpetual contracts and DeFi should boost liquidity and market participation. Traders can prepare for extended trading hours, stronger self-custody protections, and new onshore product offerings.
Bullish
Categorization: bullish. By harmonizing regulations and bringing perpetual contracts onshore, the SEC and CFTC reduce legal uncertainty and can attract institutional capital back to US markets. Similar to the regulatory clarity around Bitcoin ETFs in early 2023, clear frameworks often precede increased trading volume and liquidity. Expanded 24/7 trading and portfolio margining will lower barriers and improve capital efficiency. Safe harbors for peer-to-peer trading on DeFi protocols also validate decentralized finance and could spur innovation. In the short term, announcements typically boost market optimism. Over the long term, onshore perpetual contracts can stabilize trading, reduce offshore volume, and strengthen US market dominance, supporting higher asset valuations and deeper liquidity.