The incoming Trump administration is considering expanding the authority of the Commodity Futures Trading Commission (CFTC) to oversee the trillion-dollar digital asset market. This is part of President-elect Trump’s plan to overhaul U.S. financial regulations, marking a major shift in how the cryptocurrency market is regulated.
The Trump administration is considering giving the CFTC more authority to oversee the burgeoning digital asset market, according to a report from Fox Business. The proposal focuses on digital assets like Bitcoin and Ethereum, which are considered commodities under current law. If approved, the CFTC would have oversight over both spot markets and related exchanges.
Currently, the CFTC only regulates derivatives markets in the United States, including futures and options on commodities like oil and gold. However, the commission does not have responsibility for regulating the spot market for digital assets. The new move would allow the CFTC to issue regulations and ensure fair trading practices.
The plan reflects Donald Trump’s efforts to reduce the regulatory burden on the cryptocurrency industry while providing clearer oversight.
Challenges in expanding the CFTC’s role in regulating cryptocurrencies
Despite plans to expand its powers, the CFTC faces many challenges, especially in terms of budget and resources. The CFTC’s 2024 budget is only about $400 million, much lower than the $2.4 billion budget of the US Securities and Exchange Commission (SEC). This disparity makes it difficult to monitor a $3 trillion market.
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Additionally, the CFTC has only about 700 employees, compared to the SEC’s 5,300. Given its limited staff, the CFTC may need additional financial and human resources if it is tasked with overseeing digital asset transactions.
