Perps Are Coming Onshore | CFTC Chairman Mike Selig
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What does the approval of the first U.S.-regulated Bitcoin perpetual futures contract mean?
But we're excited to make sure that the new frontier finance is built here in the US. And that means new products, new services, new platforms. And we can't fear that. We have to embrace it and come up with a pathway for it. Because in my view, if we erect barriers, if we push this activity offshore, it will go offshore. And it's not going to benefit the American people because they're going to go use a VPN and access it anyway. And they have none of the protections. So if we can come up with a path for the United States, we'll do it. And we're going to certainly work on it.
Bankless Nation, I am once again joined by Mike Selig. He is the CFTC chairman back on Bankless. Mike, great to have you. Glad to be here. Two weeks ago, the CFTC announced the order for approval to CalSheetX for the listing of the BTC Perp contract. This is a pretty big landmark for the perpetual as an instrument.
How is the CFTC changing its approach to crypto regulation?
It's also the first onshore US Bitcoin perpetual futures contract. from a CFTC registered exchange. At the same time, the CFTC also gave Coinbase a no action letter, allowing them to pipe their customers to Deribit in order to access futures options and perps on Coinbase access through Deribit. Pretty landmark approval. Mike, are we about to see more of these? Is the CFTC opening up the gate for onshore perps? What can we expect as an industry or people who are just interested in the perpetual future instruments?
Well, thanks for having me on the show. And this is really, as you say, a watershed moment, a pivotal moment, where we've turned the tide on the years of regulation by enforcement, a lack of clear rules, kind of this offshoring, pushing things out of the country. And we want it to be here in the United States. We want the industry to survive, to thrive, and to build here in the U.S. And part of that means having a futures market, having perpetual contracts that are tradable on U.S. exchanges, under U.S. regulation, on U.S.
What implications does bringing liquidity onshore have for U.S. exchanges?
soil, and not something that you have to go use a VPN to be able to figure out how to trade. So that starts with exchanges like Kalshi, exchanges like Coinbase, and there's a long list of others who will be launching the product soon. We started off with this initial order for a Bitcoin perpetual contract that was listed on Kalshi's exchange, and we also approved the ability to access through Coinbase's broker offshore perpetual contracts. And all of these are regulated products. And that's really the theme here. This administration cares about regulation, but we also care about innovation. So we are opening the doors to new products. And we think this is the beginning. It's certainly not the end. There's many more crypto and other types of products that people want to offer here in the U.S.
that for so long have existed only offshore. So this is the beginning and not the end for sure.
The beginning and not the end. And I think that's why people in my neck of the woods are just so excited. Perps as an instrument, as perps platforms, incredibly successful as an adoption metric.
How does blockchain transparency impact the new U.S. perp market?
So like just the adoption of the perp has gone incredibly well. And perps platforms are just generating some of the greatest profits out of crypto that we've seen. And so this is why people are excited. First, we can start with Bitcoin, but we have a whole industry of assets that we would like to maybe in the same way that we had the ETFs. You know, first we started with Bitcoin and then Ether came and then there are even more ETFs. Is that something that's going to happen with perps as well?
Well, one important point is just in the week since we saw the green lighting of the Bitcoin perpetual contract, we've now seen a number of products self-certified as perpetual contracts in the digital commodity world. So we break down at the SEC and CFTC crypto assets using clear rules, unlike the last administration, uh, the, the crypto assets in the category. So we have digital commodities and these are assets that derive their value from a network or a protocol or an application, things like Bitcoin, Ethereum, Solana, uh, Uniswaps token, these types of tokens that derive value from a, from a network or product or application, uh,
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Chapters
8 chapters
1
What does the approval of the first U.S.-regulated Bitcoin perpetual futures contract mean?
0:00–0:53
2
How is the CFTC changing its approach to crypto regulation?
0:53–1:58
3
What implications does bringing liquidity onshore have for U.S. exchanges?
1:58–3:02
4
How does blockchain transparency impact the new U.S. perp market?
3:02–4:34
5
What are the potential assets for future perpetual contracts in the U.S.?
4:34–6:00
6
How will U.S. leverage differ from offshore exchanges?
6:00–7:46
7
What challenges do incumbents face against disruptors in the perp market?
7:46–9:16
8
Why are real-world asset perps gaining traction over crypto perps?
9:16–34:45
Speakers
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