The US Commodity Futures Trading Commission (CFTC) has announced that it will hold a public meeting to discuss bitcoin and digital currencies on 9th October in Washington, DC.
Created in 1975, the US CFTC is an independent federal agency that regulates the country’s futures and options markets. The meeting will be presided by the CFTC’s Global Market Advisory Committee, a group that advises the organisation on issues related to market integrity and competitiveness.
The CFTC indicated that the meeting will consist of two panels, one of which will focus on examining bitcoin and questions surrounding the CFTC’s involvement in the creation of a derivatives market for bitcoin, while the other will center on Non-Deliverable Forwards (NDFs), a form of cash-settled short-term forward contract.
The event will be open to the public, as the full release explains:
“Members of the public may also listen to the meeting via conference call using a domestic toll-free telephone or international toll or toll-free number to connect to a live, listen-only audio feed.”
Though larger questions about bitcoin’s classification as a currency or commodity persist, the agency’s first foray into bitcoin is likely to focus on more basic questions.
For example, similar introductory hearings held by the New York Department of Financial Services (NYDFS) and the US Conference of State Bank Supervisors (CSBS) centered on educating those at each respective agency about the basics of the technology, and these agencies are only now moving on to more advanced subjects.
Ongoing debate
Despite the continued regulatory uncertainty in this area, the meeting could mark the first step toward more clarity for the bitcoin industry as to what the CFTC’s involvement will be in the industry’s markets.
The CFTC has been publicly discussing whether bitcoin meets the definition of a commodity under the organisation’s rules since March, the time when TeraExchange moved to secure the agency’s approval for its recently launched bitcoin derivative.
At the time, acting CFTC chairman Mark Wetjen indicated that the group was still seeking an internal answer to this question.
“The analysis hasn’t concluded, but I think people believe there is a pretty good argument that it would fit that definition, or there are at least arguments that it would,” Wetjen said at a March conference, according to Bloomberg.
Seeking definition
The CFTC’s exploration of bitcoin also comes at time when the bitcoin market is arguably seeing its first influx of more advanced financial trading tools.
Though some resources like Seedcoin-backed BTC.sx have been around for more than a year, new entrants such as BitMEX are now emerging as some of the ecosystem’s largest exchanges are adding margin and options services.
Further, prominent members of the bitcoin community argue that such trading activity will have the long-term effect of decreasing volatility in the broader bitcoin market.
Given the evolving nature of this segment in the bitcoin market, many in the industry have called for the CFTC to provide greater clarity on how it will seek to oversee new bitcoin or block chain-based investment tools.
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