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The Commodity Futures Trading Commission (CFTC) is considering whether to open the U.S. market space to foreign crypto exchanges. Notably, these are exchanges that already follow tough rules abroad, like the EU’s Markets in Crypto-Assets (MiCA) framework.
CFTC weighs foreign exchange access for U.S. investors
In an update by Eleanor Terrett, host of CryptoAmerica, CFTC Acting Chair Caroline Pham is exploring whether to simplify regulation in the sector.
For clarity, the CFTC already has the Foreign Boards of Trade (FBOTs), which allow non-U.S. exchanges to apply for recognition. This allows such exchanges to directly access U.S. traders without requiring them to carry out a full U.S. Designated Contract Market.
If implemented, it could drive crypto adoption in the country. This is because foreign companies that meet strict international crypto standards could seamlessly serve U.S. customers. The move could ease the burden of protocols that such exchanges would have gone through if they were to fully domesticate as a U.S. exchange.
In the broader sense, it signals the willingness of the U.S. commission to recognize and accept international crypto regulations like MiCA. Such a move could make for easier collaboration and adoption of crypto by expanding trading options for U.S. investors. It will also create a level playing field for global businesses and the global market.
Will CFTC and MiCA improve global crypto markets?
Markets in Crypto Assets compliance was a big deal in the last quarter of 2024, as the regulatory framework in the EU was designed to provide clarity and oversight in the digital space.
Some crypto exchanges had issues with MiCA. For instance, Coinbase had to end its USDC rewards program in December 2024 for its users in the European Economic Area.
Mark Gofaizen, cofounder and senior partner of Gofaizen & Sherle, believes MiCA has the potential to make Europe a reliable hub for banking and international payments. Thus, with such regulatory clarity in place, the CFTC might be on the right path.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team