The U.S. Commodity Futures Trading Commission (CFTC) has released new clarifications on the physical delivery of digital assets. With the new announcement, it becomes clear that cryptoassets are becoming increasingly relevant in traditional U.S. markets.
“This announcement aims to summarize prior commission guidance and inspection actions as well as federal judicial precedents in this area”, said CFTC director of public affairs and communications, Michael Short.
Commodity trading in the mainstream involves physical delivery. In traditional markets, when participants trade futures, they are betting on future price action of an underlying asset. If they keep these futures until settlement, they receive the underlying asset physically.
U.S. regulation predicts deadline for cryptocurrency delivery
With the new document, the CFTC determines that this physical delivery of cryptocurrencies to U.S. futures markets should happen within a maximum of 28 days, according to CoinTelegraph. In this way, the buyer can use the digital asset acquired after this period. The guidance also states that the person responsible for this asset will have “the ability to freely use the entire amount of the asset for purchase and sale, no later than 28 days from the date of the transaction and at all times thereafter”, the commission said.
The CFTC also mentioned that the selling party and the facilitator do not retain any ownership. “The offeror and seller of the counterparty does not maintain any interest, legal right or control over any goods purchased on margin, leverage or other financing agreement at the expiration of 28 days from the date of the transaction.”
According to CointeTegraph’s article, the CFTC´s ongoing clarifications show the importance of buying and selling digital assets in the main financial market, stimulating responsive regulatory guidance. In January of this year, CME launched bitcoin options trading. This product launch shows continued demand for cryptocurrency and bitcoin trading after the institution launched BTC futures in 2017.