Trump aims to make CFTC lead regulator for $3T crypto market

The incoming Donald Trump administration is proposing to expand the Commodity Futures Trading Commission’s (CFTC) authority to oversee the $3 trillion digital asset market.

This initiative aims to streamline regulations around cryptocurrencies like Bitcoin (CRYPTO:BTC) and Ethereum (CRYPTO:ETH), which are classified as commodities under U.S. law.

If approved, the CFTC would gain oversight of spot markets and crypto exchanges, enhancing regulatory clarity and reducing industry uncertainty.

Currently, the CFTC regulates derivatives markets, including futures and options for commodities such as oil and gold, but does not govern spot crypto trading directly.

The proposal reflects Trump’s broader plan to ease regulatory burdens on the cryptocurrency industry while ensuring transparent and fair trading practices.

Challenges to expanding the CFTC’s role include its relatively small budget of $400 million, compared to the SEC’s $2.4 billion.

The CFTC employs approximately 700 staff members, significantly fewer than the SEC’s 5,300 employees, raising concerns about its capacity to effectively regulate such a large and dynamic market.

Former CFTC Chair Chris Giancarlo, known as “Crypto Dad” for his pro-blockchain stance, supports the agency’s expanded role, arguing that it is well-positioned to oversee digital commodities.

Giancarlo has been a frontrunner for a potential White House crypto czar role under Trump, a position aimed at promoting blockchain innovation and streamlining regulations.

Under Giancarlo’s leadership, the CFTC recognised Bitcoin as a commodity in 2015 and approved Bitcoin futures trading, solidifying its early involvement in the crypto space.

The expanded oversight would include regulating crypto exchanges, critical hubs for digital asset trading, to ensure compliance and market integrity.

Many in the crypto industry have expressed frustration with the SEC’s heavy-handed regulatory approach, particularly under outgoing SEC Chair Gary Gensler, who will step down on January 20, 2025.

Trump’s push for the CFTC to take the lead has garnered significant support from the crypto sector, which views the agency as more favorable to fostering innovation.

This shift in regulatory authority could mark a pivotal moment for U.S. cryptocurrency policy, positioning the CFTC as a central figure in overseeing and promoting the growth of the digital asset market.

The move aligns with broader efforts to establish the United States as a global leader in blockchain and cryptocurrency innovation under the incoming administration.

At the time of reporting, Bitcoin price was $92,156.89.