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- 1 Commissioner said the modifications should require companies to prepare themselves for crypto volatility.
- 2 The CFTC will accept public feedback for 60 days.
Commissioner of the CFTC, Christy Goldsmith Romero, said that the new risk-management guidelines should take into account the threats of rising cryptocurrencies.
The commissioner further emphasized that the proposed modifications should compel companies to adequately prepare for the volatility of cryptocurrencies and the risks involved in safeguarding clients’ digital assets. This suggestion came in response to the U.S. Commodity Futures Trading Commission (CFTC) proposing a revision to its risk management regulations.
In a statement, Romero said that “technologies like digital assets, artificial intelligence, and cloud services, also have emerged as areas that can carry significant risk.” The CFTC released a proposal on Thursday to solicit feedback on potential modifications to the agency’s risk management program.
The continued problems with the industry’s custody procedures were also mentioned by the speaker, who said that “brokers might consider holding customer assets in the form of stablecoins or other forms of digital property that may result in unknown and unique risks.”
The CFTC will accept public feedback on its “advance notice of proposed rulemaking” for 60 days. This is the first phase of the rule-making process, which will be followed by a formal, proposed rule and a vote on the final version.
CFTC’s Amendments in RMP
According to an advanced notice of proposed rulemaking (ANPRM) that the Commodity Futures Trading Commission released, the Risk Management Program (RMP) standards in CFTC Regulations 23.600 and 1.11 that apply to swap dealers and futures commission merchants, may be changed, The listed hazards that RMPs must monitor and manage, as well as the particular risk factors that RMPs must take into account, are just a few of the areas of the RMP rules on which the ANPRM requests information and public comment. The ANPRM also requests input on ways to enhance or change the RMP laws’ needed for risk exposure reports.
The information and feedback will be used by the Commission to inform any possible future agency action on the RMP Regulations, such as rulemaking.
Benefits of using crypto in the industry
A growing number of businesses all around the globe are adopting Bitcoin and other digital assets for a variety of transactional, operational, and investment needs.One estimate from late 2020 states that there are well over 2,300 US companies that accept Bitcoin, and that number excludes Bitcoin ATMs.
Crypto alsomake new demographic groups accessible. Crypto users often reflect a more modern audience that prefers openness in their business dealings. According to a recent survey, up to 40% of clients who pay with cryptocurrency are brand-new to the business, and their average purchase quantities are twice as high as those of credit card users.
Through tokenized conventional assets, crypto may provide access to new asset classes as well as capital and liquidity pools.
By introducing cryptocurrencies now, you might help your company’s internal expertise in this emerging technology to grow. Additionally, it may support the company’s positioning in this crucial growth market for a time when central banks might issue digital currencies.
Alternatives to traditional money are just not conceivable with cryptocurrency. For instance, programmable money may enable accurate revenue sharing in real-time while increasing transparency to simplify back-office reconciliation.
More companies are learning that their most important clients and vendors prefer cryptocurrencies as a form of payment. As a result, your organization may also require the capability to accept and distribute cryptocurrency in order to ensure seamless exchanges with important stakeholders.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
