Insights on 24/7 Trading of Derivatives
In a recent address, Caroline Pham, the acting chair of the U.S. Commodity Futures Trading Commission (CFTC), revealed insights regarding public commentary on the potential for 24/7 trading of derivatives and perpetual contracts.
Feedback on Trading Products
Notably, she highlighted that feedback received thus far pertains exclusively to cryptocurrency-related products, with no mention of traditional commodities. Pham emphasized the significant advantages that round-the-clock trading could provide, especially during emergencies over weekends, which is crucial for those managing risk.
Examples and Benefits
A key illustration she provided was the recent introduction of Coinbase Derivatives’ continuous Bitcoin futures, which has already seen weekend trading volumes that rival those of weekdays.
Additionally, Pham mentioned the agency’s exploration into the use of tokenized assets and stablecoins as collateral to mitigate credit risks associated with continuous trading.
Current Market Developments
Furthermore, she acknowledged that perpetual contracts are being traded in the U.S., referencing Bitnomial’s launch of Bitcoin perpetual futures in April.
Industry Perspectives
While some industry analysts advocate for an increase in the number of crypto perpetual contracts under U.S. regulatory oversight, arguing that it could enhance efficiency and decrease costs, others raise concerns that such contracts may not align well with physical commodities due to inherent risks and a lack of convergence.
