Newsletter
- CFTC For the first time, individual stocks' perpetual futures have been allowed to trade on registered US exchanges, introducing leveraged instruments that have been popular in the crypto market for a long time and have no expiration dates into the traditional stock market.
- Chairman Michael Selig described this as part of his efforts to bring sustainable products 'back to the United States', and it is based on the previously approved Bitcoin sustainability contract for Kalshi.
- These contracts will be under the joint supervision of CFTC and SEC in accordance with the memorandum of understanding signed in March.
The US derivatives regulatory agency has for the first time opened the door to individual stock perpetual futures, introducing one of the most popular trading tools in the crypto market into the traditional stock market.
The Commodity Futures Trading Commission (CFTC) of the United States stated on Tuesday that "equity perpetual futures," which are perpetual contracts linked to individual stocks, can now be traded on exchanges registered with the CFTC.
Sustainable futures have long been the mainstream derivatives in the crypto market. These contracts track the price of a certain asset but do not have an expiration date; traders can hold leveraged positions indefinitely as long as they meet the requirements for margin and funding rates. To date, such products have largely been unavailable to traders in the United States.
Chairman Michael Selig described this move as the latest step in bringing sustainable products back to the United States.
He said, "In my inaugural speech, I instructed CFTC to utilize its available tools to bring sustainable derivatives products back to the United States, allowing them to thrive in the U.S. under appropriate safeguards." He referred to these individual contract agreements as an extension of the institution's prior approval for the first true Bitcoin sustainable futures to be traded on a regulated U.S. exchange.
As previously reported by Decrypt, CFTC approved the launch of perpetual bitcoin futures by Kalshi earlier this year.
Selig once again emphasizes a familiar viewpoint: Regulated US platforms are safer than offshore platforms that traders have no choice but to use.
He said that bringing these products to regulated markets “will ensure that American investors and traders can access these products under the protection of a mature regulatory framework in CFTC, rather than being forced to turn to offshore platforms that are often unregulated.”
Last week, he also argued, citing the record-breaking Binance hacking incident, that offshore exchanges need U.S. regulation.
These perpetual contracts for equity are recognized as securities and futures products approved under the Commodity Futures Modernization Act of 2000, and therefore will be subject to the joint supervision of CFTC and the U.S. Securities and Exchange Commission (SEC).
Selig attributed this approval to a historic memorandum of understanding signed by the two institutions in March this year. He said that this memorandum ended the previous situation of unresolved jurisdiction; SEC Chairman Paul Atkins had described such products as being in a regulatory “no-man’s land.”
This approval comes amidst a wave of efforts to bring perpetual products back to the United States. CFTC has proposed plans to bring crypto exchanges under federal regulation, rejected the lawsuit filed by CME regarding perpetual crypto futures, and paved the way for Coinbase; Coinbase has recently applied to list single-stock perpetual contracts for stocks such as Apple, Tesla, and NVIDIA.
For Selig, the goal is clear: to ensure that "the new frontiers of finance are built in the United States of America."
