Preview: "A 24/7 trading cycle would create new opportunities and risks for traditional financial markets that do not operate on nights and weekends."
The US Securities andExchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) released a joint statement on Friday exploring a possible shift to 24/7 capital markets and regulations for crypto derivatives.
Scaling onchain finance requires a 24/7 trading environment across asset classes, the regulators said in the statement.
Crafting regulatory clarity for event contracts and perpetual futures — futures contracts without an expiry date — was also a priority. However, the agencies clarified:
“Further expanding trading hours could better align US markets with the evolving reality of a global, always-on economy. Expanding trading hours may be more viable in some asset classes than others, so there may not be a one-size-fits-all approach for all products.”
The potential pivot to “always-on” financial markets would increase capital velocity but also increase risk for traders, exposing their overnight and long-term positions to market participants in different time zones, who could knock them out of trades while they sleep.
Related: SEC’s agenda proposes crypto safe harbors, broker-dealers reforms
CFTC and SEC push Trump administration’s crypto goals forward
US president Donald Trump’s administration published its crypto report in July, outlining interagency policy recommendations to develop a comprehensive framework for the digital economy.
The report directed the SEC and CFTC to establish cooperative oversight over the crypto sector, with the CFTC having the “clear authority” to regulate spot crypto markets, while the SEC would have purview over tokenized securities.
In August, the CFTC announced a pathway for offshore crypto exchanges to serve US clients through the Foreign Board of Trade (FBOT) framework.
The FBOT registry allows regulated offshore exchanges across all asset classes to apply for a license to do business in the United States and has existed since the 1990s.
The Trump administration’s July crypto report also recommended the development of quantum-resistant architecture to safeguard cryptographic protocols from attack by quantum computers that may crack modern encryption standards in the future.
The SEC’s Crypto Assets Task Force is currently reviewing a proposal to quantum-proof digital assets before the current encryption standards that secure banking, finance and military applications are breached by a quantum device.
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