CFTC Chairman Michael Selig laid out a broad vision for derivatives regulation in an essay reported by The Economist on Aug. 6. The global derivatives market now carries a notional value of more than $1,200 trillion, he wrote, and nearly half of that falls under the CFTC's jurisdiction.
Selig said the US will not import a regulatory framework built around limited trading hours, a single exchange and traditional screen-based markets, given the spread of automated trading, artificial intelligence, algorithmic execution and real-time decision-making.
On crypto, the CFTC has already approved the first "true" bitcoin perpetual contract as a futures product, and is examining how regulated stablecoins could serve as collateral. Beyond digital assets, the first major exchange offering round-the-clock trading in gold futures launched in the US this year. The CFTC is also in talks with market participants about potential perpetual futures tied to non-crypto assets.
Prediction markets fall under the CFTC's exclusive jurisdiction, Selig said, citing their value in information aggregation, forecasting and price discovery. He pushed back against nine European financial regulators who have argued that prediction-market event contracts should be treated as gambling. That view, he said, misreads the structure of such contracts and ignores their role in economic indicators and election forecasting.
Cross-border regulatory cooperation still has value, but international agreements and arrangements must keep pace with changes in market structure and technology. The US will set global standards by encouraging innovation and preserving market integrity, rather than waiting for broad international consensus to form, Selig said.