CFTC Chair Backs Stablecoin Collateral, Perpetual Futures, and Prediction Markets

Aug. 6 — CFTC Chairman Michael Selig wrote in The Economist that the global derivatives market has surpassed $120 trillion in notional value, with nearly half falling under the CFTC's oversight. With automated trading, AI, algorithmic execution and real-time decisionmaking becoming standard, Selig said the U.S. will not move toward a regulatory framework built around limited trading hours, single venues and traditional screen-based markets. He said the CFTC has approved the first "true" Bitcoin perpetual contract as a futures product and is exploring the use of regulated stablecoins as collateral. Beyond crypto, the U.S. this year launched its first major exchange offering 24/7 gold futures trading. The CFTC is also engaging with market participants on the potential development of perpetual futures for non-crypto assets. Selig added that prediction markets fall exclusively under the CFTC's jurisdiction and can play an important role in information aggregation, forecasting and price discovery. Responding to nine European financial regulators who argued that event contracts in prediction markets should be treated as gambling, he said the view mischaracterizes how the contracts are structured and discounts their use in economic indicators and election forecasting. Selig said cross-border regulatory cooperation remains valuable, but international agreements and supervisory arrangements need ongoing updates as market structures and technology evolve. He said the U.S. will continue shaping global standards by promoting innovation while safeguarding market integrity, rather than waiting for broad international consensus.