U.S. Regulators Unite to Reinvent Crypto Oversight and Win Global Markets

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have announced plans to collaborate closely to address the fragmented oversight of the digital asset sector, aiming to harmonize regulations to foster innovation and reinforce U.S. financial leadership. A joint roundtable on Sept. 29 will serve as a pivotal step in this initiative, following a Sept. 5 statement emphasizing the need for a coordinated regulatory approach. According to the agencies, past regulatory fragmentation has discouraged innovation and driven crypto activity overseas, creating an environment of uncertainty that hampers economic growth even for legally permissible products [1].

The collaboration between the SEC and CFTC is driven by the recognition that harmonization is no longer optional. SEC Chairman Paul Atkins and CFTC Acting Chairman Caroline Pham have underscored that a unified approach can lower barriers, enhance market efficiency, and reaffirm the United States' leadership in financial innovation. Their joint statement emphasized that “by working in lockstep, our two agencies can harness our nation’s unique regulatory structure into a source of strength for market participants, investors, and all Americans” [1]. This initiative aligns with the recommendations of the President’s Working Group on Digital Asset Markets, which advocated for a regulatory framework that supports innovation while protecting investors.

Key priorities outlined for the Sept. 29 roundtable include aligning U.S. markets with the global, around-the-clock economy. Among the measures under consideration is the expansion of trading hours across select asset classes such as foreign exchange, gold, and crypto. Extending these hours, according to the agencies, could improve liquidity and market efficiency while preserving investor protections [1]. Additionally, the roundtable will explore regulatory frameworks for prediction markets and perpetual contracts, aiming to clarify rules for event-based contracts and onshore compliant perpetual swaps. These actions are expected to channel more trading activity back to U.S. platforms and ensure a level playing field for participants.

Another significant focus is on portfolio margining. A coordinated regulatory framework could allow firms to recognize offsetting positions across asset classes, reducing capital inefficiencies and streamlining risk management. The SEC and CFTC have emphasized that harmonized margin requirements would make it easier for market participants to manage net exposures while maintaining essential risk safeguards [1]. This initiative could help bridge gaps between traditional and digital financial markets, encouraging greater participation and investment.

The agencies also plan to examine exemptions for decentralized finance (DeFi) projects, aiming to create structured environments for peer-to-peer trading of spot, leveraged, or margined products without undermining investor protection standards. These exemptions are intended to foster innovation in the DeFi space while ensuring compliance with existing financial safeguards. The collaborative effort reflects a broader trend toward structured regulatory frameworks, as seen in the EU’s Markets in Crypto-Assets (MiCA) regulation, which was fully implemented in 2024 [3].

The U.S. regulatory approach is distinct from that of the EU, particularly in its emphasis on private-sector leadership in the crypto market. While the EU has adopted a more centralized approach through MiCA and is exploring a digital euro, the U.S. has focused on federal legislation such as the GENIUS Act, which regulates the issuance of stablecoins, and the pending CLARITY Act, which seeks to clarify the treatment of digital assets under federal law [3]. These legislative efforts aim to reduce regulatory overlap and provide clarity for businesses and investors alike.

Critics and experts have raised concerns about potential risks associated with increased regulation, such as restricted market access, stifled innovation, and the complexity of jurisdictional enforcement. However, both the SEC and CFTC stress that the ultimate goal is to create a regulatory environment that supports innovation while ensuring investor confidence and financial stability. The collaboration between the two agencies represents a significant shift toward a more unified and structured approach to crypto regulation in the U.S., reflecting the growing importance of digital assets in the global financial landscape.

Source:

[1] SEC and CFTC Aim to Harmonize Crypto Rules, Boost US Market Leadership (https://cryptoslate.com/sec-and-cftc-aim-to-harmonize-crypto-rules-boost-us-market-leadership/)

[2] Crypto Rules in Europe vs. the US: Does Your Stablecoin Strategy Need to Change? (https://www.nasdaq.com/articles/crypto-rules-europe-vs-us-does-your-stablecoin-strategy-need-change)

[3] Cryptocurrency Regulation: A Guide to U.S. & Global Policies (https://www.britannica.com/money/cryptocurrency-regulation)