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CFTC Regulatory Shift Could Open Greenfield Growth for Coinbase Prediction Markets: Analyst

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The newly appointed Chairman of the U.S. Commodity Futures Trading Commission (CFTC), Michael Selig, has signaled a significant shift towards clearer federal oversight of crypto-linked prediction markets, in line with a report from Clear Street analyst Owen Lau.

In his first public remarks as CFTC Chair, Selig outlines a imaginative and prescient of nearer coordination with the Securities and Exchange Commission (SEC) to unlock innovation throughout blockchain-based markets.

Speaking at a joint SEC–CFTC Harmonization Event, Selig mentioned the company would prioritize a unified federal method fairly than pursuing parallel regulatory initiatives.

“The goal is to implement clear and principled guidelines of the highway for crypto,” Lau wrote.

“Project Crypto” Introduced Ahead of Congressional Action

Selig’s feedback come as lawmakers proceed to debate broader market construction laws, which might decide whether or not digital tokens fall underneath securities or commodities regulation and make clear jurisdictional boundaries between the SEC and the CFTC.

Clear Street notes that the chairman’s initiative — known as “Project Crypto” — arrives even earlier than Congress has finalized settlement on a market construction invoice.

Lau mentioned the transfer additionally outshines the Senate Agriculture Committee’s development of the “Digital Commodity Intermediaries Act,” which handed with partisan backing on the identical day.

“This is the kind of management the business has been looking for for years,” Lau mentioned.

CFTC Moves to Withdraw Restrictions on Event Contracts

More considerably, Selig indicated the CFTC is ready to take higher management over the regulatory uncertainty surrounding prediction markets, a sector that has confronted mounting litigation and unclear oversight.

Lau highlighted that Selig directed company workers to withdraw the 2024 occasion contracts rule proposal, which might have banned political- and sports-related occasion contracts. He additionally ordered the withdrawal of a 2025 workers advisory cautioning companies towards providing sports-related contracts amid ongoing court docket disputes.

Clear Street believes Selig acknowledges that the earlier hands-off posture has contributed to authorized uncertainty fairly than market stability.

Drafting New Rules and Defending CFTC Jurisdiction

To promote innovation and competitors, Selig instructed workers to draft a brand new rulemaking framework for occasion contracts and reassess the company’s participation in court docket issues at present pending.

Lau mentioned it’s more and more possible the CFTC will defend its unique jurisdiction over commodity derivatives, together with sports-related occasion contracts, when jurisdictional disputes come up.

“These actions might strengthen the case that prediction market platforms have been making to the courts,” Lau wrote.

Coinbase and Circle Seen as Potential Beneficiaries

Clear Street added that corporations resembling Coinbase (COIN) and Circle (CRCL) may benefit from the regulatory developments, calling prediction markets a “greenfield alternative.”

Coinbase just lately launched prediction markets throughout all 50 U.S. states, whereas Circle’s USDC stablecoin is broadly used on crypto-native platforms resembling Polymarket.

While uncertainty stays over whether or not courts will uphold future CFTC rulemaking, Lau mentioned the shift represents a constructive growth for the rising prediction market ecosystem.

The publish CFTC Regulatory Shift Could Open Greenfield Growth for Coinbase Prediction Markets: Analyst appeared first on Cryptonews.

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