The Commodity Futures Trading Commission (CFTC) chairman, Heath Tarbert, cleared Ethereum as commodities about a fortnight ago, leading to speculation about a possible launch of ether-backed derivatives in the near future.
Well, the dream looks very much real as Heath confirmed the regulation of ETH-backed derivatives is set to complete sometime in 2020.
Speaking during the first day of the DC Fintech Week, the CFTC chairman said,
“I’d say it is likely that you would see a futures contract in the next six months to a year.”
Tarbert however cautions the overall stability of the market given no company is yet to show interest in offering ETH backed derivatives. Nonetheless, he commends the job of his commissioners in pushing through regulation of ETH-backed derivatives in the US believing the rest is for “the market to decide”.
“The volume to which it’ll trade, no idea, that’s where the markets decide, but my guess is now that we’ve provided at least … a little bit more clarity [on ether derivatives].”
Regulation process similar to Bitcoin futures
The next steps by CFTC in regulating ETH based futures are similar to the bitcoin futures regulation process. Institutions looking to list Ethereum-backed derivatives in the US will either select the CFTC to go through the product and verify it or self-verify the product themselves to receive the license to list.
On the subject of companies selecting the commission to approve the project, Tarbert said,
“Now in the past most people have not been self-certifying, they’ve been coming to us particularly if they’re creating an entirely new exchange and DCO [derivatives clearing organization] so it’ll depend I think in large part on who wants to have it on their trading platform.”
CFTC regulation stance on other crypto derivatives
The fireside chat further dwelled on the possibility of the other cryptocurrencies launching their own derivative products in the country. Tarbert confirmed a number of cryptocurrency derivatives will be launched soon but did not specify the time limit to launch. He further said that securities may be changed to commodities and vice versa emphasizing the role lies within the jurisdiction of the Securities Exchange Commission (SEC).
Earlier in the month, the SEC, FINRA and CFTC released statements to the cryptocurrency industry urging the players to abide by existing financial and banking laws in the US.