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As has already been publicized, the SEC and the Commodity Futures Trading Commission signed a historic memorandum of understanding. CFTC Commissioner Caroline Pham, known for her support of the industry and for specific companies operating within it, such as Ripple, has spoken in favor of regulatory harmonization and issued what can be described as a programmatic statement, calling for the implementation of the principles she has advocated for over many years.
Caroline Pham’s roadmap to regulatory clarity for crypto
In her view, the existing uncertainty has been killing innovation. She argues that the following six points must be introduced to turn the United States into the crypto capital of the world.
Key points of SEC-CFTC harmonization, according to Pham:
- The first point is clarification of product definitions and the necessity to establish joint interpretations to finally determine whether a token is a security or a commodity after years of uncertainty.
- Second, Pham believes it is essential to modernize financial frameworks by updating clearing, margin and collateral rules, specifically enabling the use of stablecoins and tokenized assets as collateral to improve capital efficiency.
- The third point is reducing regulatory friction. In her opinion, it is necessary to cut red tape for duly registered exchanges so they can operate under a single, streamlined compliance regime.
- The fourth point, which she believes will "make America the crypto capital of the world," is fit-for-purpose regulation. Pham calls for moving away from legacy rules to create a framework specifically designed for crypto assets and emerging technologies.
- The fifth point is streamlined reporting; a unified reporting system should be created to reduce costs for funds by standardizing data requirements across agencies.
- Finally, the last point is coordinated oversight, meaning joint risk monitoring and enforcement instead of duplicative investigations by the SEC and the CFTC.
The motto under which Pham released this plan is “Stronger, faster, cheaper, together.” It is a direct signal to the market that the era in which companies like Ripple have spent hundreds of millions of dollars on litigation due to the lack of coordination between regulators should be coming to an end.
Dan Burgin
Vladislav Sopov
