Here’s How the Crypto Industry is Responding to the CFTC’s Call on Perpetuals
In response to the CFTC’s call on perpetuals, the crypto industry has taken a series of actions. The details are as follows:
Coinbase: It has pointed out that perpetuals account for “upwards of 90%” of the trading volume of crypto futures, exceeding even the spot trading volume. It believes that perpetuals are the most successful financial innovation in the crypto field. If the US can properly regulate them, it will be able to tap into a multi – trillion – dollar market that has been booming overseas. The “simplicity” of perpetual futures makes them more accessible to retail investors, allowing them to obtain leveraged exposure without the complexity of traditional futures products or spot crypto.
Paradigm: It has called on the CFTC to embrace decentralized trading protocols instead of limiting perpetuals to traditional exchanges. It also suggests creating a perpetual special advisory committee to examine DeFi perpetuals, aiming to leverage “the power of smart contracts and blockchain technology” to “catalyze the transformation of our broader financial markets”.
Hyperliquid Labs: It supports the CFTC’s positive attitude and has called on regulators to embrace the DeFi framework to create safer and more efficient financial products. It has outlined three core benefits of decentralized perpetuals, namely, transparency, composability, and self – custody. It has also proposed implementing a principle – based regulatory process, which focuses on risk profiles and actual consumer outcomes rather than setting strict categories that may hinder innovation.
OKX: It has promoted the liquidity advantages of perpetuals, stating that the lack of multiple expiration periods allows perpetual futures to attract greater liquidity than traditional futures, especially for long – dated expiries. Perpetuals are attractive to options traders looking to hedge their exposure and basis traders seeking arbitrage opportunities between exchanges.
In general, major crypto companies are urging regulators to embrace crypto perpetual futures contracts, believing that these financial instruments could revolutionize derivatives trading if properly regulated in the US.
Related topic:
