CFTC Commissioner proposes pilot program for crypto regulation

• The primary objective of the pilot program is to test and gather data while developing a pragmatic approach to tokenization.
• The ultimate decision on whether to implement any changes permanently will be made by the commission after the program’s conclusion.

CFTC Commissioner Caroline Pham has proposed a limited pilot program to address crypto regulation in the United States. Speaking at a Cato Institute event on 7 September, Pham highlighted the need for the U.S. to catch up with crypto-friendly jurisdictions.

Pham’s proposal involves conducting public roundtable discussions to gather input and insights from stakeholders in the crypto industry. She intends to use this feedback to design a pilot program specifically tailored to digital asset markets.

Further, Pham drew parallels with regulatory sandboxes that have been implemented at the state level. She also emphasized the importance of creating a framework for emerging technologies and market structures within the existing legal and regulatory framework.

Pilot program aims to address crypto regulatory challenges

The primary objective of the pilot program is to test and gather data while developing a pragmatic approach to tokenization. Pham believes that this approach will help uphold the CFTC’s mandate to foster open, transparent, competitive, and financially sound markets.

Moreover, Pham’s proposal includes the organization of a stakeholder roundtable to facilitate discussions and collaboration among various industry participants.

She has called for the CFTC to propose and adopt rules related to the risks associated with crypto, drawing from insights gained through previous pilot programs.

The ultimate decision on whether to implement any regulatory changes permanently will be made by the commission after the conclusion of the pilot program.

Caroline Pham has been serving as a commissioner with the CFTC since April 2022. During her tenure, she has consistently advocated for greater clarity and regulatory oversight in the crypto industry. She has also sponsored initiatives within the commission, such as the Global Markets Advisory Committee.

Biden administration and crypto regulations

Recently, Ripple [XRP] co-founder Chris Larsen criticized the Biden administration for driving the crypto industry out of the United States and towards offshore locations like Singapore, Dubai, and London due to unclear regulations.

Larsen also expressed dissatisfaction with SEC Chair Gary Gensler’s “regulation by enforcement” approach. He called for clear and comprehensive crypto regulations established by legislative bodies to provide much-needed clarity to the industry.

In July, the House Financial Services Committee approved the Financial Innovation and Technology for the 21st Century Act, signaling progress in the regulatory landscape.

This bill aims to provide a comprehensive framework for regulating digital assets and could undergo a full House vote. It could potentially impact the regulatory environment for crypto before 2024.