CFTC Issues a Primer on Digital Assets

Regulatory Update

On December 17, 2020, the CFTC’s innovation office, “LabCFTC,” released a 36-page Digital Assets Primer to provide updated information to the public about emerging concepts in digital assets. This Digital Assets Primer is part of a series of Primers released by LabCFTC, others including “A CFTC Primer on Virtual Currencies,” “A Primer on Smart Contracts,” and “A Primer of Artificial Intelligence in Financial Markets.” 

Brian Trackman, LabCFTC Senior Counsel and lead author explained the purpose of this particular primer as, “[t]his Digital Asset Primer builds on LabCFTC’s 2017 Primer on Virtual Currencies, which focused on virtual currencies like bitcoin. The focus of this Digital Asset Primer is broader to include not only virtual currency, but also smart contracts and other digitized representations of value or ownership.” This primer acknowledges the ongoing development in this space and highlights the need for regulatory coordination in this evolving market.

The Primer discusses a wide variety of areas surrounding Digital Assets:

  • Overview of Digital Assets
    • Digital asset ecosystem
    • Virtual currencies
    • Digital assets v. Virtual currencies
  • Digital Asset Markets
    • Measuring digital asset markets
  • Regulatory Response
    • Benefits and risks
    • Building blocks for regulatory framework
    • Government authorities 
    • Regulatory engagement
  • Digital Assets and the CFTC
    • CFTC jurisdiction
    • Digital asset market oversight
  • CFTC-Regulated Digital Asset Derivatives
    • Digital asset listed products
    • Product certification and review process 
  • Digital Assets Moving Forward
    • Topics for further consideration 

It is important to keep in mind while reviewing the Digital Asset Primer that LabCFTC Fintech Primers were created to be educational tools explaining emerging fintech innovations. They are not meant to describe the official policy or position of the CFTC, or to limit the CFTC’s current or future positions or actions. 

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