The incoming Donald Trump administration is considering expanding the regulatory authority of the Commodity Futures Trading Commission (CFTC) to cover the $3 trillion digital asset market. This potential move is part of an initiative to reshape financial regulations in the U.S. under President-elect Trump. The decision could mark a major shift in how the crypto market is regulated.
Donald Trump Administration Eyes CFTC To Oversee Digital Asset Regulation
According to a Fox Business report, Donald Trump’s administration is looking to increase the regulatory reach of the CFTC by granting the agency oversight of the growing digital asset market. The proposal would specifically target digital assets such as Bitcoin and Ethereum, which are considered commodities under current law. If the plan moves forward, the CFTC would gain the authority to regulate the spot markets and exchanges.
Currently, the Commodity Futures Trading Commission oversees U.S. derivatives markets, including futures and options on commodities like oil and gold. However, the commission has not been responsible for regulating the digital asset spot markets. This move will grant the regulatory body new authority to enforce rules and ensure fair trading practices.
The decision is part of Donald Trump’s effort to reduce cryptocurrency regulatory burdens on the industry while providing clearer oversight.
Challenges of Expanding CFTC Role in Crypto Regulation
However, the current budget of the CFTC is much smaller than that of the Securities and Exchange Commission (SEC). The Commodity Futures Trading Commission’s 2024 budget is roughly $400 million, compared to the SEC’s budget of $2.4 billion. This discrepancy is a challenge to the agency’s ability to oversee a $3 trillion market effectively.
In addition, the CFTC employs only around 700 staff members, compared to the SEC’s 5,300 employees. This limited capacity could require additional funding and resources if the commission is tasked with overseeing digital asset transactions.
Former CFTC Chair Chris Giancarlo supports stronger crypto regulation and backs the agency’s expanded role. Giancarlo argued that the commission has been involved in crypto markets since 2015, when it recognized Bitcoin as a commodity. Giancarlo has suggested that, with proper funding and leadership, the regulatory commission could regulate digital commodities.
Also known as “Crypto Dad” for his progressive stance on blockchain and digital currencies, Giancarlo is a frontrunner for the proposed White House crypto czar role under Donald Trump. The role will streamline crypto regulations and promote blockchain development.
Under Giancarlo’s leadership, the commission approved the trading of Bitcoin futures, further cementing its role in overseeing the digital currency space.
In addition to overseeing the spot market, the regulatory body would also have the authority to regulate crypto exchanges, which are critical to the market.
Many in the crypto industry have voiced frustration with the SEC’s approach, which has led SEC chair Gary Gensler to announce his resignation on January 20, 2025. As a result, Donald Trump’s push for the CFTC to lead has garnered support from the crypto sector.
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