The Commodity Futures Trading Commission (CFTC) is reportedly “seriously” looking into whether Bitcoin may fall under its scope.
Bitcoin, which was founded in 2009 as a decentralized, digital currency, has seen a spike in value in recent months, as concerns grow over traditional bank deposits and currencies.
Bart Chilton, commissioner of the CFTC, told the Financial Times Bitcoin “is for sure something we need to explore.” Chilton told the publication, “It’s not monopoly money we’re talking about here — real people can have real risk in these instruments, and we need to ensure that we protect markets and consumers, even in what at first blush appear to be ‘out there’ transactions.”
Potential regulation is one of the biggest challenges that Bitcoin faces, but the U.S. government has not said much in regards to the digital currency.
In March, an arm of the U.S. Treasury Department said that “companies that exchange or transfer virtual currency, like Bitcoin, will be considered money-service businesses,” according to Fox Business. This means the firms must provide information to the government in order to prevent money laundering.
It’s probable that new regulation would seek to make Bitcoin become more transparent. Additionally, there is the possibility that regulators could opt to ban Bitcoin.
However, one source told the Financial Times that Bitcoin would not be under authority unless it becomes the basis for a derivatives contract. “Leveraged Bitcoin transactions settled in more than two days, known as ‘rolling spot’ transactions, would similarly fall under the CFTC’s oversight,” the Financial Times wrote.
Despite the source’s statement that Bitcoin would not fall under CFTC jurisdiction, Chilton does not share the same sentiment. “In essence, we’re talking about a type of shadow currency, and there is more than a colorable argument to be made that derivative products relating to Bitcoin falls squarely in our jurisdiction,” Chilton said.