CFTC Commissioner Proposes ‘First-Ever’ US Pilot Program for Crypto Regulation – Caroline D. Pham, a Commissioner at the Commodity Futures Trading Commission (CFTC), has introduced a groundbreaking pilot program in the United States aimed at fostering the growth of legally compliant digital asset markets and tokenization.
The regulatory authority underscored its commitment to innovation in technology, novel products, and market structures through its principles-based framework. On Thursday, Commissioner Caroline D. Pham of the Commodity Futures Trading Commission (CFTC) put forth her proposal for a regulatory sandbox initiative designed to oversee cryptocurrency assets.
She posted on social media platform X: “It’s time to take action. I propose the first-ever U.S. pilot program for digital asset markets as a regulatory sandbox to test, gather data, & examine innovation. This creates a safe framework for new technologies & market structures under existing regulations & protections.”
During her remarks at the Cato Institute on Thursday, the commissioner explained that the “wait and see” approach currently adopted by U.S. regulators towards the potential opportunities of blockchain technology and digital assets “falls short of the proactive measures needed in this rapidly evolving industry.”
Noting that she has “consistently called for the CFTC to use [its] existing authority to provide regulatory clarity for digital assets to ensure that robust guardrails are in place,” the commissioner detailed: “Our principles-based framework is built for innovation in technology, new products, and market structure.”
She highlighted that her proposed pilot program will integrate lessons learned from prior pilot initiatives that concentrated on aspects such as trading regulations, reporting obligations, registration prerequisites, and risk disclosure mandates.
The commissioner also emphasized that given the CFTC’s oversight of the world’s largest financial markets, the regulatory body bears “a responsibility to proactively take on new challenges instead of passive observation.” She stressed: “That’s why I’m recommending a time-limited CFTC pilot program to support the development of compliant digital asset markets and tokenization.”
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“As a first step, the CFTC should call for a roundtable to engage all stakeholders,” she described. “After that, the CFTC should propose and adopt rules establishing a pilot program for a specific period of time that incorporates many of the components drawn from past pilot programs, including registration and eligibility requirements, financial resources and other conditions, risk management, products and contract terms, and other requirements including disclosures and reporting.”
Pham added: “At the conclusion of the pilot program, the Commission should examine the data gathered from the pilot and consider whether there should be a permanent change to our rules.” She concluded: “This proposal shows us how the CFTC can safely explore innovation while maintaining appropriate protections for our markets.”