The SEC and CFTC have released a joint statement exploring the transition to 24/7 capital markets and regulatory frameworks for crypto derivatives.
24/7 Trading in Capital Markets
The regulators stated that scaling on-chain finance requires a 24/7 trading environment across asset classes. Their statement indicates that 'further expanding trading hours could better align US markets with the evolving reality of a global, always-on economy.'
Challenges and Risks of Expanding Trading Hours
While expanding trading hours may increase capital velocity, it also increases risk for traders, exposing their positions across different time zones. This could lead to traders being knocked out of trades while they sleep.
Prospects for Crypto Market Regulation
The regulators' statement also focuses on creating clarity for event contracts and perpetual futures. Recommendations from the Trump administration’s report in July also called for interagency policy development for the crypto economy.
The discussion on transitioning to 24/7 capital markets and improving regulation for crypto derivatives showcases the SEC and CFTC's commitment to adapting to global changes in the financial sector.
