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Chairman Of CFTC Calls For U.S. To Be Digital Asset Leader, Issues New Guidance – Forbes


Last week, the CFTC issued guidance on ‘delivery’ of digital assets. The guidance focuses on the actual delivery of a virtual asset in retail commodity transactions and is a continuation of the leadership of Chairman Heath Tarbert with his call for the U.S. to be a leader in digital assets. ‘Providing clarity to market participants is one of the CFTC’s core values,’ said CFTC Chairman Heath P. Tarbert. ‘This interpretive guidance not only fulfills that commitment, but it reflects my belief that the U.S. must be a leader in the digital asset space. These efforts are also especially critical when the hard-earned income of everyday Americans is at stake. Under my leadership, the CFTC will continue to do its part to encourage responsible fintech innovation through sound regulation.’

‘This interpretive guidance not only fulfills that commitment, but it reflects my belief that the U.S. must be a leader in the digital asset space.’

CFTC Chairman Heath Tarbert, March 24, 2020

This is not the first time that Chairman Tarbert has offered his position that the U.S. must provide leadership on digital assets and is consistent with his prior message, as noted earlier this year.

CftcChairman Tarbert Discusses U.S. Leadership in Digital Assets on CNBC

‘Delivery’ Of Digital Assets

The conditions for the customer to have actual delivery include the secure possession and entire control of the commodity and the ability to use the entire quantity of the commodity freely in commerce no later than 28 days from the date of the transaction. The offerer must not retain any interest in, legal right, or control over any of the commodity at the expiration of 28 days from the date of the transaction. As the report mentions,

‘Indeed, in its simplest form, actual delivery of virtual currency connotes the ability of a purchaser to utilize the virtual currency purchased “on the spot” as a medium of exchange in commerce or within the entirety of its relevant blockchain ecosystem.’

17 CFR Part 1 Final Interpretive Guidance: Retail Commodity Transactions Involving Certain Digital Assets

The report notes it defines virtual currency broadly, and that it does not intend to create a bright line definition given the evolving nature of the commodity and its underlying blockchain or DLT technology. It describes virtual currency as a digital asset with any digital representation of value or unit of account used as a form of currency through units, tokens, or coins, and may be distributed by ‘smart contracts’.

‘…virtual currency: is a digital asset that encompasses any digital representation of value or unit of account that is or can be used as a form of currency (i.e., transferred from one party to another as a medium of exchange); may be manifested through units, tokens, or coins, among other things; and may be distributed by way of digital “smart contracts,” among other structures.’

Definition of Virtual Currency from the CFTC’s Final Guidance On Delivery of Digital Assets

The CFTC noted the Division of Market Oversight led the development of the final interpretive guidance, which was informed by significant CFTC engagement with the digital asset marketplace. With public input, a Technology Advisory Committee or ‘TAC’ on the evolution of digital asset and cryptocurrency markets, regulatory oversight of exchanges offering digital asset-based derivatives products, as well as inputs from LabCFTC, the agency has created a strong network of pooling information to help make informed decisions on regulations to help support the digital asset marketplace. A link to the press release and full text of the guidance is below.

CftcCFTC Issues Final Interpretive Guidance on Actual Delivery for Digital Assets

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